News & Our Thinking

Weekly Investor

Weekly Investor – October 1, 2018

01 October 2018

S&P Gives Strong Performance in Q3

Stocks closed out the third quarter on a high note, as the S&P 500® Index returned 7.7% during the period.

Big banks view the extended run-up in U.S. equities as a sign for investors to use caution. Earlier this month, Morgan Stanley outlined the firm’s stance on peaking earnings growth, while JPMorgan informed its clients about the potential for the U.S. economy to lose its edge because of trade. But opposing views are not uncommon during periods of prolonged growth.

Meanwhile, news surrounding the confirmation of Supreme Court nominee Brett Kavanaugh will set the tone for the November elections, which historically have caused a “bump” to stocks in the final quarter.

The S&P 500 Index was down -0.5% for the week. Its top-performing sectors included Telecommunications (1.1%) and Health Care (0.9%), while bottom-performing sectors included Financials (-4.1%) and Basic Materials (-4.5%). In the fixed-income market, the 10-year Treasury yield was down slightly, ending at less than 3.1%.

We continue to seek companies that reflect our Change-BasedSM investment approach.

Baxter Remains on Path of Change

Baxter International Inc. (BAX) develops, manufacturers and markets products that save the lives of people with chronic and acute medical conditions. Baxter applies its expertise in medical devices to create products that advance patient care worldwide.

Since CEO Jose Almeida took the reins of the company in early 2016, Baxter has undergone significant changes. It spun off Baxalta, its bio-science division, to focus on its core supply and device businesses, and greatly improved its balance sheet and cash flow. Baxter continues its turnaround, which is centered on accelerating the company’s growth process. Because of these changes and the company’s room for further improvement, we believe Baxter is a good fit for Argent’s Change-BasedSM investment approach.

 Top 5 Equity Holdings

Large Cap Growth

Alphabet Inc. (Google) 7.8%
Post Holdings Inc. 5.1%
Baxter International 5.0%
MasterCard Inc. 4.5%
First Data Corporation 4.1%

Small Cap Core

Fortinet Inc. 3.9%
Health Ins. Innovations 3.2%
Wintrust Financial Corp. 2.7%
Merit Medical Systems 2.5%
G-III Apparel Group Ltd. 2.5%

Dividend Select

JPMorgan Chase & Co. 5.6%
ConocoPhillips 4.6%
Occidental Petroleum 4.4%
Pfizer Inc. 4.2%
Target Corporation 4.1%

Mid Cap 

NVIDIA Corporation 3.5%
NetApp Inc. 3.2%
Amedysis Inc. 3.1%
Cintas Corporation 3.1%
CDW Corporation 3.1%

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.