ARGENTCAPITALFUNDS.COM
MENU

News & Our Thinking

Weekly Investor

Weekly Investor – June 24, 2019

24 June 2019

Geopolitical Concern

Last week’s headlines were dominated by Iranian-U.S. relations. On June 14, Iran bombed two oil tankers around the Strait of Hormuz. To start last week, Iran shot down a U.S. drone. On Friday, U.S. President Donald Trump had prepared retaliatory action on three Iranian sites, but, at the last minute, called the action off. Despite increased geopolitical risks, continued trade disputes and spotty economic data, the S&P 500® Index closed at an all-time high last week, returning 2.2%, fueled by the Federal Reserve’s dovish comments Wednesday, along with an equity rally in Europe Thursday.

In stock news Facebook unveiled plans for a new cryptocurrency called the ‘Libra’. The company reportedly has already received backing from Visa, Mastercard, PayPal and Uber. The euphoria sent Facebook’s shares up 5.4% last week, but plenty of regulation and supervision details remain before the proposed 2020 launch. Boeing Co. announced that its troubled 737 Max design is under full review by regulators, signaling that the Max’s pathway back to service is underway. The positive update sent shares were up 7%.

The S&P 500® Index was up 2.2% for the week. Its top-performing sectors were Energy (5.2%) and Technology (3.3%), while bottom-performing sectors were Basic Materials (0.2%) and Consumer Staples (0.1%). In the fixed-income market, the 10-year Treasury yield was even, ending at 2.1%.

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


Change Based Investment

Facebook, Inc. (FB) provides various social networking products to connect and share through mobile devices, personal computers, and other devices worldwide. Its solutions include the company’s namesake Facebook website and app, Instagram and WhatsApp Messenger. Facebook was founded in 2004 and is headquartered in Menlo Park, California.

Overall, negative news has done little to change Facebook user behavior. New users continue to subscribe at a pace similar to the past and advertisers continue to bid up prices they are willing to pay for ads, indicating that the reach and frequency Facebook provides is increasingly valuable relative to other options to reach consumers. While it is impossible to know the impact of future regulation on Facebook’s business model, we believe the company’s growth prospects remain bright. As such, we believe Facebook represents a good holding for Argent’s Large Cap strategy.

 

Top 5 Equity Holdings


Large Cap Growth

Alphabet Inc. (Google) 7.2%
Post Holdings, Inc. 5.4%
Mastercard, Inc. 5.4%
Marvell Technology Group 4.7%
First Data Corporation 4.6%

Small Cap Core

Upland Software Inc. 2.9%
Planet Fitness, Inc. 2.9%
Fortinet Inc. 2.7%
Wintrust Financial 2.6%
UFP Technologies, Inc. 2.3%

Dividend Select

JPMorgan Chase & Co. 5.5%
Microsoft Corp. 4.3%
Marvell Technology Group 4.2%
Pfizer Inc. 4.2%
Target Corporation 4.1%

Mid Cap 

CDW Corporation 3.8%
Cintas Corporation 3.6%
Bright Horizons Family 3.3%
Ciena Corporation 3.1%
NVR, Inc. 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.