Weekly Investor – April 23, 2018
Strong Earnings Lift Stocks
U.S. stocks slipped in the final two days of trading but still notched gains for the week, buoyed by generally strong earnings results and energy shares. With earnings season ramping up, positive results across industrials, energy and financials led to increased investor confidence.
The five largest U.S. banks finished reporting strong first-quarter results last week, driven by robust trading revenue. Despite better sales and earnings, Goldman Sachs Group Inc. shares lost ground for the week, after the bank said it would not reduce share count next quarter.
Shares of Netflix Inc. rose sharply after subscribers increased by 7.4 million for the quarter. By contrast, Apple Inc. fell sharply after a number of analysts cut their projections for iPhone sales, adding to concern about the technology firm’s main source of profit ahead of upcoming financial results next month.
Looking ahead, earnings season will swing into full gear next week, with Alphabet Inc., Microsoft Corp., Amazon.com Inc., Facebook Inc., Comcast Corp. and Caterpillar Inc. expected to announce results. First quarter gross domestic product also will be released Friday.
The S&P 500® Index was up 0.5% for the week. Its top-performing sectors included Energy (2.6%) and Industrials (2.1%), while bottom-performing sectors included Real Estate (-1.0%) and Consumer Staples (-4.4%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at nearly 3%.
We continue to seek companies that reflect our Change Based InvestingSM approach.
Always Improving
Danaher Corp. (DHR), headquartered in Washington, D.C., operates primarily as a medical company that designs, manufactures and markets healthcare, environmental and industrial equipment. Its four main segments are Life Sciences, Diagnostics, Dental and Environment & Applied Solutions.
DHR has a long history of delivering consistent earnings growth through continually improving its business. The company also is adept at acquiring businesses that are fast-growing and have high returns. Over the years, DHR’s management team has demonstrated skill and discipline in selecting and integrating its many purchases. Most recently, DHR spun off its industrial division into a separate company called Fortive (FTV). This move should increase DHR’s growth rate and allow more focus on acquisitions to drive value.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. | 7.4% |
| Red Hat Inc. | 5.5% |
| Baxter International | 4.6% |
| Marvell Technology | 4.4% |
| JP Morgan Chase & Co. | 4.2% |
Small Cap Core
| Wintrust Financial | 3.1% |
| Fortinet Inc. | 2.9% |
| Lumentum Holdings | 2.3% |
| First Internet Bancorp | 2.3% |
| Pacific Premier Bancorp | 2.2% |
Dividend Select
| JP Morgan Chase & Co. | 5.8% |
| Occidental Petroleum | 4.3% |
| ConocoPhillips | 4.1% |
| Principal Financial Group | 3.9% |
| Las Vegas Sands Corp. | 3.8% |
Mid Cap
| NVIDIA Corporation | 6.3% |
| Applied Materials Inc. | 3.3% |
| NVR Inc. | 3.1% |
| Cintas Corporation | 2.9% |
| Globus Medical Inc. | 2.8% |
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.
