News & Our Thinking

Weekly Investor

Weekly Investor – April 30, 2018

30 April 2018

GDP Growth Cited in Estimate

On Friday, the U.S. Commerce Department announced in its first estimate that real GDP grew at a 2.3% annual rate in the first quarter, which was higher than expected but slower than the 2.9% rate in the fourth quarter of 2017.

Earnings season was in full swing last week, after 180 constituents of the S&P 500® Index announced quarterly results. Inc. made headlines, announcing 42% year-over-year revenue growth along with a price hike for its Prime® membership, from $99 per year up to $119. The positive news pushed Amazon’s stock price over $1,600—an all-time high.
Meanwhile, Facebook Inc. announced revenue 50% higher compared to 1Q17, which helped the stock return more than 9% on Thursday.

Earnings season continues this week as 147 companies in the S&P 500 are expected to release quarterly results. Among them are Apple Inc., Berkshire Hathaway Inc., Pfizer Inc., MasterCard Inc. and McDonald’s Corp.

The S&P 500 remained steady for the week at nearly 3%. Its top-performing sectors included Utilities (2.8%) and Real Estate (2.6%), while bottom-performing sectors included Basic Materials (-2.1%) and Industrials (-3.1%). In the fixed-income market, the 10-year Treasury yield also was even during the week, ending at nearly 3%.

We continue to seek companies that reflect our Change Based InvestingSM approach.

Stage Set for Gains

Through its subsidiaries, DowDuPont Inc. (DWDP) engages in agriculture, materials science and specialty-products businesses worldwide. The Michigan-based company founded in 1897 was formerly known as The Dow Chemical Company, but merged with DuPont in 2017.

The fusion of these two world-class American companies represents a unique opportunity to create shareholder value. DWDP initially plans to split into three companies that will be able to combine in ways unique to their businesses. The immediate impact is a planned 30% reduction in costs. Ed Breen, the CEO of the new entity, is known for creating significant shareholder value and used a similar strategy at Tyco. Because of these dynamics, we we believe DWDP offers favorable odds for our clients.

 Top 5 Equity Holdings

Large Cap Growth

Alphabet Inc. 7.2%
Red Hat Inc. 5.7%
Baxter International 4.9%
Marvell Technology 4.3%
JP Morgan Chase & Co. 4.1%

Small Cap Core

Wintrust Financial 3.2%
Fortinet Inc. 2.8%
Mastec Inc. 2.2%
Pacific Premier Bancorp 2.2%
First Internet Bancorp 2.1%

Dividend Select

JP Morgan Chase & Co. 5.7%
Occidental Petroleum 4.3%
ConocoPhillips 4.1%
Principal Financial Group 3.8%
Las Vegas Sands Corp. 3.8%

Mid Cap 

NVR Inc. 3.3%
NVIDIA Corporation. 3.1%
Cintas Corporation 3.0%
Globus Medical Inc. 2.9%
E*Trade Financial Corp. 2.9%

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.