Weekly Investor – March 20, 2017
Fed Raises Rates
U.S equity markets ended slightly up last week. The biggest news of the week came courtesy of The Federal Reserve. As promised, the Fed raised interest rates by a quarter point and stated the expectation of two more rate increases this year. However, equity markets and investors were expecting more than two increases this year and the announcement caused the Financials sector to stumble and end in negative territory for the week. Earnings season is winding down and despite the uncertainty in the political landscape, U.S. companies continue to exceed profit and sales estimates. Approximately 80% of S&P 500® Index companies have reported results exceeding earnings expectations. For the week, Wynn Resorts, Ltd. (WYNN) turned in the best stock performance within the S&P 500 with a 10.69% gain. Rumors of a takeover by Las Vegas Sands Corp. boosted the stock. Looking ahead, investors will continue to listen to any news coming out of Washington and hope for continued positive equity market performance.
The S&P 500® Index was down 0.2 % for the week. The top-performing sectors in the S&P 500® Index included Utilities (1.3%) and Telecommunications (1.3%), while bottom-performing sectors included Health Care (-0.7%) and Financials (-0.9%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at 2.5%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Danaher Corp. (DHR), headquartered in Washington, D.C., is a designer, manufacturer and marketer of medical, professional and consumer products. DHR was founded in 1969 and was previously known as DMG, Inc., but later took the Danaher name in 1984. The company produces a broad range of products including electronic calibration equipment, retail/commercial petroleum products such as underground storage tank leak detection systems, high-precision optical systems for the analysis of microstructures and aerospace defense articles, among others. DHR’s primary product lines are sold in North America, Europe and Asia.
DHR has a long history of delivering consistent earnings growth through continual development of its own businesses and by acquiring businesses that are fast growing and have high returns. Over the years, the company’s management team has demonstrated skill and discipline in selecting and integrating its many purchases. Most recently, DHR spun off its industrial division as a separate company called Fortive (FTV). This move further aligns the company in higher-growth end markets and allows DHR a more focused approach to acquisitions in order to drive value.
Top 10 Equity Holdings
|Alphabet, Inc. (Google, Inc.)||6.8%|
|Post Holdings, Inc.||4.3%|
|Baxter International Inc.||4.1%|
|Marvell Technology Group||3.9%|
|JP Morgan Chase & Co.||3.9%|
|ON Semiconductor Corp.||3.9%|
|Skyworks Solutions, Inc.||3.8%|
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.