Weekly Investor – March 13, 2017
Rally Ends
U.S equity markets ended their rally last week and the S&P 500® turned in the worst weekly performance of 2017 at -0.4%. However, the index has had a great start to the year and remains up 6.42% on a year-to-date basis. Crude oil dropped $2.86 per barrel on Wednesday which is the largest one day percentage decline since February 2, 2016. This sharp drop came on increased inventories as the U.S. Energy Department stated that oil reserves increased by 8 million barrels from the previous week. U.S. economic data was mostly positive and factory and durable goods orders were up more than expected. Additionally, employment data was positive and investors now await next week’s Federal Open Market Committee meeting with a high expectation of an interest rate increase. Stay tuned…
The S&P 500® Index was down 0.4 % for the week. The top-performing sectors in the S&P 500® Index included Technology (0.5%) and Health Care (0.2%), while bottom-performing sectors included Utilities (-1.2%) and Energy (-2.6%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at 2.6%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Favorable Odds
ConAgra Foods, Inc. (CAG) operates as a food company in North America. CAG operates through three segments: Consumer Foods, Commercial Foods and Private Brands. CAG was founded in 1919 and is headquartered in Omaha, Nebraska.
In 2012, CAG purchased Ralcorp, a prior Argent holding. Since this time CAG has struggled with execution issues, specifically within its private brands segment. However, a new management team, led by CEO, Sean Connolly, is focused on implementing a turnaround effort at the company. With a proven track-record of success within branded foods, we believe CAG’s new management team has the potential to improve the return profile of the business, offering favorable odds for our portfolio.
Top 10 Equity Holdings
| . | |
|---|---|
| Alphabet, Inc. (Google, Inc.) | 6.8% |
| Post Holdings, Inc. | 4.3% |
| Baxter International Inc. | 4.2% |
| Marvell Technology Group | 4.0% |
| JP Morgan Chase & Co. | 4.0% |
| Masco Corporation | 3.9% |
| ON Semiconductor Corp. | 3.9% |
| CBS Corporation | 3.8% |
| Skyworks Solutions, Inc. | 3.8% |
| Lincoln National | 3.7% |
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.
