Weekly Investor – November 12, 2018
A Up and Down Week
Last week, the S&P 500® Index moved higher through Tuesday’s midterm elections and trailed off Thursday and Friday. The market closed out the week 2.1% higher. Technology shares were the main drag on the major indexes. At the end of the week, Skyworks plunged after its results signaled a slowdown in smartphone demand echoing Apple’s results in the prior week.
Oil fell into bear market territory, closing out the week at just over $60 a barrel, after hitting $76 earlier this month. Oil production is at record highs and OPEC output is at the highest level since 2016. In addition, an economic slowdown is on the mind of investors as some see the cycle peaking. China is on investor’s radar after softer economic data is raising concerns about the vitality of the world’s second biggest economy. Looking ahead to this week, CPI and retail sales will be watched closely.
The S&P 500 was up 2.1% for the week. Its top-performing sectors were Health Care (4.0%) and Real Estate (3.6%), while bottom-performing sectors were Energy (0.9%) and Telecommunications (-0.2%). In the fixed-income market, the 10-year Treasury yield was even, ending at 3.2%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Embracing Change
Danaher Corp. (DHR), headquartered in Washington, D.C., designs, manufactures and markets healthcare equipment. Its product lines include Life Science and Diagnostic tools and products.
Danaher 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 improving the returns of those businesses. Over the years, Danaher’s management team has demonstrated skill and discipline in selecting and integrating its many purchases. Danaher’s management team has not been afraid to cull its businesses as well, to drive share holder value. For instance, in 2016 Danaher spun off its industrial businesses to shareholders as Fortive (FTV). In mid-2018, the company announced its intent to spin off its dental operations. These changes leave the stand-alone Danaher as a more focused healthcare organization with higher organic growth prospects. We believe Danaher embraces Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.6% |
| Post Holdings, Inc. | 5.3% |
| MasterCard, Inc. | 4.6% |
| Target Corporation | 4.3% |
| JP Morgan Chase & Co. | 4.3% |
Small Cap Core
| Fortinet, Inc. | 2.9% |
| Wintrust Financial Corp. | 2.8% |
| Merit Medical Systems | 2.7% |
| Planet Fitness, Inc. | 2.5% |
| Health Ins. Innovations | 2.4% |
Dividend Select
| JPMorgan Chase & Co. | 5.9% |
| Pfizer, Inc. | 4.4% |
| Target Corporation | 4.2% |
| ConocoPhillips | 4.2% |
| Occidental Petroleum | 4.2% |
Mid Cap
| CDW Corporation | 3.4% |
| NetApp Inc. | 3.3% |
| Amedisys, Inc. | 3.3% |
| Cintas Corporation | 3.0% |
| Bright Horizons Family | 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.
