News & Our Thinking

Weekly Investor

Weekly Investor – June 11, 2018

11 June 2018

S&P Up Again

Last week the S&P 500® Index posted its third consecutive weekly gain.

Looking abroad, on Friday, Brazil’s central bank pledged to support the country’s currency, causing it to strengthen while the dollar remained unchanged. Additionally, part of the Group of Seven’s (G-7) two-day meeting in Canada kicked off on Friday, and President Trump dominated the headlines with comments ranging from tariffs to Russia’s exclusion from the group.

Oil continues to be closely watched, as the commodity closed near $66 a barrel leading up to the OPEC meeting scheduled for later this month. Index heavyweight Apple sold off Thursday and Friday after a report by Nikkei detailed the company’s plans to reduce iPhone parts orders by 20%. The company still expects iPhone shipments of 80 million units this year.

Utilities stocks were the only group in the S&P 500 to post losses last week. Interest rates, measured by the 10-year Treasury, rose, causing the sector to trade lower through Wednesday before regaining some ground through the end of the week. Looking ahead to next week, the G-7 meeting, combined with the Consumer Price Index (CPI), the Producer Price Index (PPI) and retail sales releases, will keep investors supplied with plenty of data points.

The S&P 500 was up 1.6% for the week. Its top-performing sectors included Telecommunications (3.4%) and Consumer Discretionary (3.2%), while bottom-performing sectors included Energy (0.6%) and Utilities (-3.2%). In the fixed-income market, the 10-year Treasury yield was up for the week, ending at 3.0%.

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

Huntsman Poised for Growth

Huntsman Corporation (HUN) manufactures chemicals for the international plastics, automotive and construction industries. Based in The Woodlands, TX, HUN was founded by Jon Huntsman Sr. in 1970.

HUN is in the midst of transforming itself from a commodities chemical company to a specialty chemicals company. Successful completion of this change should drive higher profit margins and a higher valuation. HUN began this transformation with the partial spin-off of its commodity and pigments business – Venator (VNTR) – announced in late 2016. We expect HUN will continue to adjust its product mix over time with the goal of becoming a specialty chemicals manufacturer. Given the positive, fundamental change the company is undergoing, we believe HUN fits our change-based investment model.

 Top 5 Equity Holdings

Large Cap Growth

Alphabet Inc. 7.4%
Baxter International 4.9%
Marvell Technology 4.4%
Mastercard Inc. 4.2%
JP Morgan Chase & Co. 4.0%

Small Cap Core

Wintrust Financial 3.2%
Fortinet Inc. 3.1%
Mastec Inc. 2.4%
Pacific Premier Bancorp 2.2%
Carbonite Inc. 2.2%

Dividend Select

JP Morgan Chase & Co. 5.6%
Occidental Petroleum 4.6%
ConocoPhillips 4.2%
Las Vegas Sands Corp. 3.9%
Marvell Technology Group 3.8%

Mid Cap 

NVIDIA Corporation 3.4%
NVR Inc. 3.1%
Cintas Corporation 3.1%
CDW Corporation 3.1%
Globus Medical Inc. 3.0%

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.