Weekly Investor – March 12, 2018
A Strong Week
Equities have been on a bit of a roller coaster so far in 2018, posting an outstanding January, only to give a large portion of the gains back in February. Last week the S&P 500® Index found its footing again and returned 3.5%, recording its second-best week of trading in 2018. On a year-to-date basis, stocks are back in positive territory, up 4.6%.
After much anticipation, trade war fears, sparked the previous week by President Trump’s proposed import tariffs on steel and aluminum, softened last week after some exemptions were revealed. Positive U.S. economic news also helped drive the market upward. February non-farm payroll increases were much higher than expected, posting the largest increase in 19 months.
The S&P 500® Index was up 3.5% for the week. The top-performing sectors in the S&P 500 Index included Industrials (4.4%) and Financials (4.4%), while bottom-performing sectors included Consumer Staples (1.7%) and Utilities (-2.4%). In the fixed-income market, the 10-year Treasury yield was even during the week, ending at 2.9%.
We continue to seek those companies that reflect our Change-Based InvestingSM approach.
Potential Changes
Baxter International Inc. (BAX) develops, manufacturers and markets through its subsidiaries products that save and sustain the lives of people with chronic and acute medical conditions. BAX applies its expertise in medical devices to create products that advance patient care worldwide.
After years of underperformance, BAX is undergoing significant change. BAX spun off its bioscience division, Baxalta, to focus more on its core supply and device businesses. The company also 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
Large Cap Growth
| Alphabet Inc. (Google, Inc.) | 7.6% |
| Red Hat Inc. | 5.1% |
| Marvell Technology Group | 4.9% |
| Baxter International Inc. | 4.5% |
| JP Morgan Chase & Co. | 4.2% |
| Masco Corporation | 4.0% |
| Fortive Corporation | 4.0% |
| Mastercard Inc. | 3.8% |
| Cognizant Technology | 3.6% |
| Lincoln National | 3.4% |
Small Cap Core
| Wintrust Financial | 3.1% |
| Fortinet Inc. | 2.7% |
| Mastec Inc. | 2.5% |
| Pacific Premier Bancorp | 2.4% |
| First Internet Bancorp | 2.3% |
Dividend Select
| JP Morgan Chase & Co. | 5.9% |
| Marvell Technology | 4.2% |
| Principal Financial Group | 3.8% |
| Las Vegas Sands Corp. | 3.8% |
| DowDuPont Inc. | 3.5% |
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.
