Weekly Investor – October 8, 2018
S&P Dips Slightly After Strong Start
Equities traded lower last week as small cap stocks took the brunt of the hit relative to large caps. The S&P 500® Index ended the week down 1%, with technology stocks leading the decline. Consumer Discretionary stocks showed the worst performance for the week, while Financials showed strength.
In economic news, the September ADP National Employment Report announced the largest jump in jobs since February, showing evidence of strong hiring even with the declining U.S. unemployment rate, which is 3.7%. The strong employment numbers raised possible concerns of future interest rate hikes, causing an increase in Treasury yields.
The S&P 500 was down -1.0% for the week. Its top-performing sectors included Energy (1.9%) and Utilities (1.9%), while bottom-performing sectors were Real Estate (-2.7%) and Consumer Discretionary (-4.4%). In the fixed-income market, the 10-year Treasury yield was up, ending at more than 3.2%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Prospects Remain Attractive for Biogen
Biogen Inc. (BIIB) discovers, develops and manufactures therapies to treat neurological and autoimmune diseases worldwide. It was founded in 1978 and is headquartered in Cambridge, Massachusetts.
Biogen’s CEO, named in 2016, announced a more focused strategy to accelerate the company’s growth prospects through internal research and business development efforts. This comes on the heels of a new product launch that is driving better-than-expected results. While early signs are promising, Biogen’s attractive valuation offers a compelling opportunity ahead of key Alzheimer’s trials that could transform the company if successful. These changes within Biogen make it a good fit for Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.6% |
| Post Holdings, Inc. | 5.1% |
| Baxter International | 4.9% |
| MasterCard, Inc. | 4.5% |
| Fortive Corporation | 4.2% |
Small Cap Core
| Fortinet, Inc. | 3.8% |
| Health Ins. Innovations | 3.1% |
| Wintrust Financial Corp. | 2.9% |
| Merit Medical Systems | 2.8% |
| Premier, Inc. | 2.3% |
Dividend Select
| JPMorgan Chase & Co. | 5.7% |
| ConocoPhillips | 4.7% |
| Occidental Petroleum | 4.4% |
| Pfizer, Inc. | 4.3% |
| Target Corporation | 3.9% |
Mid Cap
| NVIDIA Corporation | 3.5% |
| NetApp Inc. | 3.2% |
| Cintas Corporation | 3.2% |
| CDW Corporation | 3.0% |
| Amedisys, 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.
