Weekly Investor – November 19, 2018
Another See-Saw Week
Equities were on a see-saw last week. The S&P 500® Index was down 2.8% thru Wednesday, only to pare losses and close last week down 1.6%. Consumer Discretionary and Information Technology sectors were laggards. Brick and mortar retail stocks fell after Nordstrom and Macy’s announced disappointing earnings results. The worst performing technology stocks last week were Nvidia Corp. (-20%) and NetApp Inc. (-12%). Nvidia announced quarterly revenue and earnings below market expectations, which caused the stock to drop on Friday. The advanced computer chip maker pointed to waning crypto-currency demand.
Oil dipped below $60 for the first time since February. After reaching $76 in early October, the commodity closed at $55 on Tuesday, only to stabilize and trade slightly higher to end the week. Global growth concerns, a strong dollar and continued oil production have contributed to the price drop.
Looking ahead to this week, investors will be focused on housing starts, consumer confidence and durable goods orders for confirmation of continued economic strength.
The S&P 500 was down 1.6% for the week. Its top-performing sectors were Real Estate (0.8%) and Basic Materials (0.4%), while bottom-performing sectors were Technology (-2.5%) and Consumer Discretionary (-3.8%). In the fixed-income market, the 10-year Treasury yield was down, ending at 3.1%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change-Based Growth
E-Trade Financial Corporation (ETFC) is a New York-based financial services company that provides online brokerage products and services primarily to individual investors.
Since 2013, E-Trade has been able to achieve growth in accounts and assets while decreasing the size of its troubled legacy home equity loan portfolio. In October 2016, dissatisfied with the company’s growth rate, E-Trade’s board removed and replaced its CEO. At the same time, the board gave the company a mandate to grow faster. We believe the change going on in the company and the consolidations in E-Trade’s industry creates a positive backdrop for the stock — and for our clients.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.7% |
| Post Holdings, Inc. | 5.6% |
| MasterCard, Inc. | 4.5% |
| JP Morgan Chase & Co. | 4.3% |
| Fortive Corporation | 4.1% |
Small Cap Core
| Fortinet, Inc. | 2.9% |
| Merit Medical Systems | 2.9% |
| Wintrust Financial Corp | 2.9% |
| G-III Apparel Grup LTD | 2.5% |
| Planet Fitness, Inc. | 2.5% |
Dividend Select
| JPMorgan Chase & Co. | 5.9% |
| Pfizer, Inc. | 4.4% |
| ConocoPhillips | 4.3% |
| Occidental Petroleum | 4.2% |
| Target Corporation | 3.9% |
Mid Cap
| Amedisys, Inc. | 3.5% |
| CDW Corporation | 3.4% |
| Cintas Corporation | 3.2% |
| NetApp, Inc. | 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.
