Weekly Investor – May 20, 2019
Trade War Tension
After reaching a new high on the last day of April, the S&P 500® Index has trended down in May. Despite trading higher in the middle of last week, the index fell by -0.8% to close the week. The markets rode the wave of trade talks with China. A potential Trump/Xi meeting has been a highly watched event as part of the Group of 20 meeting in Japan next month. On Friday, President Trump delayed tariffs on imported vehicles from the EU, Japan, and other nations. That delay has focused the White House and investors on China trade. The trade war was felt in Deere shares as the stock traded lower after releasing lower than expected earnings which highlighted a dimming outlook for the company. Tensions in the Middle East, specifically tensions with Iran, have come back into play. The global risk-off trade has pushed emerging market stocks down since the mid-April highs.
Stocks of note in the U.S. last week include COTY, a manufacturer of beauty products. COTY was the best performing stock in the S&P 500 after insider filings showed its management has been purchasing the stock after an additional 20% of the company was purchased by JAB Investments in April. Looking ahead to next week, housing and jobs numbers will be on investor’s radar.
The S&P 500® Index was down –0.8% for the week. Its top-performing sectors were Real Estate (1.4%) and Utilities (1.2%), while bottom-performing sectors were Industrials (-1.9%) and Financials (-2.1%). In the fixed-income market, the 10-year Treasury yield was down, ending at 2.4%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change-Based Investment
Crown Castle International (CCI) operates as a real estate investment trust. Crown Castle owns, operates and leases cell towers and other infrastructure for wireless communications. The company was founded in 1994 and is headquartered in Houston, TX.
Several years ago, Crown Castle took a different strategy than its main competitor, American Tower. With the purchase of NextG in 2012, Crown Castle began investing in small cell networks – a new way of expanding its wireless coverage. This change is important as wireless carriers roll out new 5G infrastructure (the next generation of wireless connectivity). With the build out of the 5G market, increasing demand for small cell networks and Crown Castle’s record of solid execution, we believe the company has a long runway for sustainable sales and dividend growth.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.7% |
| Post Holdings, Inc. | 5.8% |
| Mastercard, Inc. | 5.3% |
| Marvell Technology Group | 4.6% |
| First Data Corporation | 4.5% |
Small Cap Core
| Planet Fitness, Inc. | 3.2% |
| Upland Software Inc. | 3.0% |
| Fortinet Inc. | 2.9% |
| Wintrust Financial | 2.7% |
| Amphastar Pharma. | 2.4% |
Dividend Select
| JPMorgan Chase & Co. | 5.8% |
| Microsoft Corp. | 4.2% |
| Pfizer Inc. | 4.1% |
| Marvell Technology Group | 4.1% |
| Comcast Corporation | 3.9% |
Mid Cap
| CDW Corporation | 3.7% |
| Cintas Corporation | 3.6% |
| NVR, Inc. | 3.2% |
| Worldpay Inc. | 3.1% |
| Bright Horizons Family | 3.1% |
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.
