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Weekly Investor

Weekly Investor – February 4, 2019

04 February 2019

A Great Start to 2019

Equity markets closed higher last week. The S&P 500® Index had an 8% return during the month of January, which was the best January since 1987 and the best month since October 2015. Information Technology and Energy were the top performing sectors during the month, fueled by strong quarterly corporate earnings announcements. Oil prices started the week down as fears of a China slowdown worried investors. However, the commodity closed up on news that Saudi oil shipments had slowed. Charter Communications was the top performing stock in the S&P 500 last week with a 17% return. General Electric Co. was also a top performing name, rallying 11% last week. The 126-year-old industrial conglomerate reported better than expected free-cash-flow for the quarter.

According to Bloomberg, this earnings season has been strong, with 237 names in the S&P 500 reporting so far, 178 or ~75% have met or beat estimates. Overall, corporate earnings remain strong, jobs, wages and consumer confidence are high and the Federal Reserve appears to have softened its stance on interest rate hikes.

The S&P 500 was up 1.6% for the week. Its top-performing sectors were Energy (3.2%) and Consumer Staples (2.9%), while bottom-performing sectors were Financials (0.1%) and Consumer Discretionary (-0.1%). In the fixed-income market, the 10-year Treasury yield was down, ending at 2.7%.

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


Changed-Based Investment

ON Semiconductor Corp. (ON) designs, manufactures and markets semiconductor components for electronic systems and products worldwide. The company was founded in 1999 and is headquartered in Phoenix, Arizona.

ON is well-positioned to benefit from the increasing need for electronic components to power safer, smarter, more connected cars over the next few years. ON has also made acquisitions. It acquired Aptina, a smaller peer, as well as Fairchild Semiconductor. These acquisitions allow ON to generate much of its revenue from the auto industry. We believe this market will grow for ON as the number of sensors and cameras on cars increase. We also believe the growth of connected devices, stemming from the Internet of Things (IoT), can lead to increased sales and profit growth for the company. Because of these positive changes, ON 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. 5.4%
Mastercard, Inc. 4.7%
First Data Corporation 4.5%
Marvell Technology 3.9%

Small Cap Core

Fortinet Inc. 3.3%
Merit Medical Systems 2.8%
Planet Fitness, Inc. 2.8%
Wintrust Financial Corp. 2.8%
Amphastar Pharma. 2.6%

Dividend Select

JPMorgan Chase & Co. 5.6%
ConocoPhillips 4.4%
Pfizer Inc. 4.4%
Occidental Petroleum 3.9%
Life Storage, Inc. 3.7%

Mid Cap 

Amedisys, Inc. 3.7%
Cintas Corporation 3.3%
CDW Corporation 3.2%
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.