Weekly Investor – February 11, 2019
Earnings Season Rolls On
The S&P 500® Index rose 0.1% for the first full week in February. For the month of January the S&P 500 returned 8.0%, following a painful fourth quarter of 2018. On Monday of last week, Information Technology and Industrials stocks led the way. Earnings releases and expectations were the catalysts as companies like Alexion Pharmaceuticals, Clorox, Seagate and Alphabet all beat earnings estimates. On Thursday, concerns over global demand and uncertainty on China and US trade pressured the Energy, Information Technology and Material sectors. Crude oil prices closed the week at $52.72 per barrel, falling 4.6% for the week. US initial jobless claims of 234K were higher than the consensus estimate of 221K, but lower than the previous week.
Highlights for specific companies included Mattel, which climbed nearly 25% for the week. The stock opened higher on Friday after better than expected Barbie sales drove earnings for the fourth quarter. Anadarko, an oil and gas exploration company, was the week’s worst performing stock in the S&P 500 Index, declining nearly 14%. The stock began to fall Wednesday and continued to decline through Friday after releasing disappointing earnings. This week will bring more earnings news from companies such as Cisco, Coca-Cola, Pepsi, NVIDIA, CME and many more.
The S&P 500 was up 0.1% for the week. Its top-performing sectors were Utilities (2.0%) and Technology (1.8%), while bottom-performing sectors were Basic Materials (-1.5%) and Energy (-3.3%). In the fixed-income market, the 10-year Treasury yield was down, ending at 2.6%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Changed-Based Growth
Post Holdings, Inc. (POST) manufactures, markets and distributes branded, ready-to-eat cereals in the United States, Canada and the United Kingdom. The company was founded in 1897 and is based in St. Louis, Missouri.
We think highly of POST’s management team and its ability to drive value creation for shareholders. Additionally, POST is the number three player in its industry and possesses strong brands and impressive cash flow generation. We believe a focused POST, whose management has a history of acquisition-driven shareholder value creation, is a good reflection of Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.6% |
| Post Holdings, Inc. | 5.4% |
| Mastercard, Inc. | 4.7% |
| First Data Corporation | 4.6% |
| Fortive Corporation | 4.0% |
Small Cap Core
| Fortinet Inc. | 3.1% |
| Wintrust Financial Corp. | 2.8% |
| Merit Medical Systems | 2.8% |
| Planet Fitness, Inc. | 2.8% |
| Amphastar Pharma. | 2.7% |
Dividend Select
| JPMorgan Chase & Co. | 5.5% |
| Pfizer Inc. | 4.3% |
| ConocoPhillips | 4.3% |
| Life Storage, Inc. | 3.9% |
| Occidental Petroleum | 3.8% |
Mid Cap
| Amedisys, Inc. | 3.6% |
| CDW Corporation | 3.4% |
| Cintas Corporation | 3.3% |
| Xilinx Inc. | 3.1% |
| Ciena Corporation | 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.
