Weekly Investor – August 21, 2017
Another Down Week
The S&P 500 Index had another down week returning -0.6%, making it the second worst week of 2017. The first seven months of 2017 have all ended in positive territory; however, August is currently in the red with just two weeks remaining. The week started off on a positive note as tensions with North Korea declined but the market quickly dipped back into negative territory as rhetoric surrounding Charlottesville revived questions about President Trump’s ability to achieve his policy agenda. In economic news, retail sales advanced higher than expected in July and the University of Michigan Consumer Sentiment Index also beat expectations reporting its highest level since January. Wynn Resorts Limited, a luxury hotel and casino resort operator and current Argent Large Cap Growth holding, returned 7.4% last week. The stock jumped 6.4% on Tuesday after a large bank upgraded the company to a buy from a hold. This had a positive effect on other casino resort operators as well as they also outpaced the market that day.
The S&P 500® Index was down for the week. The top-performing sectors in the S&P 500® Index included Utilities (1.3%) and Basic Materials (0.4%) while bottom-performing sectors included Telecommunications (-1.8%) and Energy (-2.7%). In the fixed-income market, the 10-year Treasury yield was down during the week, ending at 2.5%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
New Management Team
Baxter International Inc. (BAX) develops, manufacturers, and markets products that save and sustain the lives of people with chronic and acute medical conditions through its subsidiaries. BAX applies its expertise in medical devices to create products that advance patient care worldwide.
After years of underperformance, BAX is undergoing significant change. Recently, BAX spun off its bioscience division, Baxalta, to focus more on its core supply and device businesses. Recently, the company announced the hiring of Jose Almeida to take over as its new CEO. Jose’s track record while running Covidien included accelerating growth and profitability at the company, two key elements to unlock shareholder value at BAX in our view.
Top 10 Equity Holdings
|Alphabet, Inc. (Google, Inc.)||7.2%|
|Baxter International Inc.||4.7%|
|Post Holdings, Inc.||4.2%|
|ON Semiconductor Corp.||4.0%|
|Red Hat, Inc.||3.9%|
|Skyworks Solutions, Inc.||3.9%|
|Wynn Resorts Ltd.||3.9%|
|JP Morgan Chase & Co.||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.