Weekly Investor – January 4, 2016
A New Year
U.S equity markets ended the last week of the year lower as stocks exposed to energy and commodities lost ground. The price of oil fell after Iran’s oil minister reiterated the country’s goal of increasing exports to pre-sanction levels and crude stockpiles unexpectedly increased last week. Gold fell for 2015, marking three consecutive annual losses. In economic news, December Consumer Confidence Index numbers surprised as confidence registered 96.5 and was ahead of consensus expectations. However, the Chicago PMI plummeted to 42.9 from 48.7 in November, its lowest reading since 2009. In general, readings above 50 point to expansion while below 50 signals a contraction. Looking ahead into the New Year, investors will pay close attention to corporate earnings reports and hope for good news.
The S&P 500® was down 0.8% for the week. The top-performing sectors in the S&P 500® Index included Consumer Discretionary (-0.4%) and Utilities (-0.5%), while bottom-performing sectors included Basic Materials (-1.7%) and Energy (-2.2%). In the fixed-income market, the 10-year Treasury yield was even during the week, ending at 2.3%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Upside Potential
C.H. Robinson Worldwide, Inc. (CHRW) is a third party logistics company which provides freight transportation services and solutions to various industries worldwide. CHRW was founded in 1905 and is headquartered in Eden Prairie, Minnesota.
As a best-in-breed third party logistics company, we believe CHRW has the opportunity to take advantage of favorable conditions within the North American trucking industry. In fact, our Main Street Contacts have confirmed several positive industry trends for CHRW including strong trucking pricing and the need for additional trucking capacity within North America. Improving U.S. economic growth only boosts the opportunity for these trends to continue. In addition, CHRW recently acquired Freightquote.com, further solidifying the company’s commitment to grow its market share by gaining exposure to increasing segments of the logistics market. We believe positive industry conditions coupled with CHRW’s best-in-breed status provide favorable odds for our portfolio.
Top 10 Equity Holdings
| . | |
|---|---|
| Alphabet, Inc. (Google, Inc.) | 7.1% |
| Post Holdings, Inc. | 5.1% |
| Danaher Corp. | 4.1% |
| Electronic Arts, Inc. | 4.1% |
| ConAgra Foods, Inc. | 3.9% |
| Expedia, Inc. | 3.6% |
| Skyworks Solutions, Inc. | 3.5% |
| Teva Pharmaceutical | 3.4% |
| JP Morgan Chase & Co. | 3.3% |
| LinkedIn Corporation | 3.3% |
This newsletter presents selected recommendations from portfolio managers of Argent Capital Management LLC, a registered investment advisor. Opinions reflect the portfolio manager’s judgment on the date above and are subject to change. A list of stocks recommended by Argent is available upon request. You should not assume that these recommendations are or will be profitable. In the course of it’s business, Argent’s client accounts may be buying and selling these stocks.
