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News & Our Thinking

Weekly Investor

Weekly Investor – September 25, 2017

26 September 2017

 

Another High

The S&P 500 Index posted a new all-time closing high of 2,508.24 on Wednesday, after breaking through the 2,500 point ceiling the previous week. However, after hitting the new high, the index was basically flat for the rest of the week. Equity markets seemed unfazed by the President’s remarks at the United Nations on Tuesday as tensions remain high between the US and North Korea. As the market expected, the Fed did not raise rates last week and confirmed its plan to begin unwinding its $4.5 trillion balance sheet in October. The biggest surprise from the announcement after the two-day Fed meeting was that 12 of the 16 members of the FOMC think the Fed will raise rates one more time in 2017. After the announcement, yields rose across the board with the 2-year treasury yield spiking to the highest level since 2008. As we enter into earnings season once again, next week will bring earnings news from Red Hat, Inc., NIKE Inc., Carnival Corp., Micron Technology Inc., Conagra Brands Inc. and others.

The S&P 500® Index was up 0.1% for the week. The top-performing sectors in the S&P 500® Index included Telecommunications (3.8%) and Financials (2.6%) while bottom-performing sectors included Consumer Staples (-2.3%) and Utilities (-2.8%).  In the fixed-income market, the 10-year Treasury yield was up 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

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.) 7.0%
Baxter International Inc. 4.7%
ON Semiconductor Corp. 4.2%
Celgene Corp. 4.1%
Masco Corporation 4.1%
Marvell Technology Group 4.1%
Post Holdings, Inc. 4.1%
Wynn Resorts Ltd. 4.0%
Red Hat, Inc. 4.0%
Fortive Corporation 3.9%

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.