Weekly Investor – April 1, 2019
First Quarter in the Books
US equity markets closed the month of March on a positive note as the S&P 500® Index returned 1.2% for the week. The S&P 500 returned 13.7% in the
first quarter of 2019, its best quarterly performance since third quarter 2009, showing a reversal from the previous quarter’s decline of 13.5%. The top sectors for the first quarter of 2019 were Information Technology, Real Estate, and Industrials. By way of contrast, the Information Technology and Industrials sectors were in the bottom three performers the previous quarter.
In economic news, US initial jobless claims were lower than the previous week’s report and better than consensus estimates. New home sales for February increased 4.9% increase over the previous month, much higher than the consensus expectations.
CarMax, a retail seller of used cars and trucks, rose 13.3% last week. The stock climbed Friday morning after releasing fourth quarter earnings that beat expectations. Nielsen Holding PLC, a global measurement and data analytics company, was the week’s worst performing stock in the S&P 500, declining 11.9%. The stock opened lower on Thursday after a New York Post article revealed that private equity firm Blackstone Group decided against making an offer for the company.
The S&P 500 was up 1.2% for the week. Its top-performing sectors were Industrials (2.9%) and Basic Materials (2.0%), while bottom-performing sectors were Communication Services (-0.5%) and Utilities (-0.5%). In the fixed-income market, the 10-year Treasury yield was even, ending at 2.4%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Changed-Based Investment
Apple Inc. (APPL) designs, manufactures and markets mobile communication and media devices, personal computers and related products.
Apple stands to benefit from higher iPhone revenues, driven by demand for more expensive phones. Apple also has maintained growth in its high-margin Services segment by generating revenue from offerings such as the App Store, iTunes, Apple Music, iCloud and Apple Pay, among others. Given the changes in tax law, Apple has access to over $100 billion it can use for dividends, share buybacks, internal investments or acquisitions. We expect Apple will use its excess cash to generate shareholder value. Given these positive changes, we believe Apple fits with Argent’s Change BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.7% |
| Post Holdings, Inc. | 5.8% |
| Mastercard, Inc. | 4.9% |
| First Data Corporation | 4.5% |
| Danaher Corp. | 4.2% |
Small Cap Core
| Planet Fitness, Inc. | 3.1% |
| Fortinet Inc. | 3.0% |
| Merit Medical Systems | 2.9% |
| G-III Apparel Group LTD | 2.8% |
| Gray Television Inc. | 2.5% |
Dividend Select
| JPMorgan Chase & Co. | 5.3% |
| Pfizer Inc. | 4.2% |
| ConocoPhillips | 4.2% |
| Target Corporation | 3.9% |
| Microsoft Corp. | 3.9% |
Mid Cap
| CDW Corporation | 3.4% |
| Xilinx Inc. | 3.3% |
| Cintas Corporation | 3.3% |
| Amedusys, Inc. | 3.2% |
| Wordplay 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.
