Weekly Investor – September 3, 2019
A Volatile Month
Stocks had a volatile month in August, with the S&P 500® rallying 2.8% last week to close the month in total down -1.6%. Concerns over the trade war whipsawed the S&P 500 over the course of the month. The markets are contrasting positive economic signs, in the form of strong company earnings, against negative rhetoric coming from President Trump concerning trade and his distrust of the Federal Reserve. Focusing on the positive side of the market, personal spending accelerated in July. Consumers in the U.S. remain strong while the rest of the world slows.
On the back of the consumer strength, the Industrials sector, led by J.B. Hunt Transport Services, was the top-performing sector with a 3.6% return for the week. United Rentals was another Industrial stock pushing the group higher. Looking at the broader market, companies of all sizes rose during the week. Mid-cap stocks, measured by the Russell MidCap® Index, were higher by about 2.4% and small-caps, measured by the Russell 2000® Index, closed out the week higher by 2.4%. Looking ahead to this week, after the holiday lengthened weekend, the markets will consider the Sino-American tariffs that went into effect on Sunday. In addition, investors will closely monitor Hurricane Dorian that is expected to cause an estimated $40 or $50 billion in damage to the Florida coastline.
The S&P 500 was up 2.8% for the week. Its top-performing sectors were Industrials (3.6%) and Communication Services (3.4%), while the bottom-performing sectors were Utilities (1.8%) and Consumer Staples (1.6%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.5%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Founded in 1966, Mastercard Incorporated provides technology to enable electronic payments for individuals, financial institutions, merchants, governments and businesses worldwide. Mastercard’s brands include MasterCard, Maestro and Cirrus.
Mastercard is well-positioned to benefit from the continuing change in payments from cash and checks to electronic transactions. The company has a solid track record of being a technology leader in its industry, consistently delivering growth to its shareholders. In addition, the company continues to make acquisitions to broaden its geographic reach and increase its product offerings. We believe the growth prospects for the company and the change in payments globally make Mastercard a fit for Argent’s Change-BasedSM investing approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.6% |
| Mastercard, Inc. | 5.7% |
| Fiserv, Inc. | 5.4% |
| Post Holdings, Inc. | 5.1% |
| Target Corporation | 4.8% |
Small Cap Core
| Fortinet Inc. | 3.0% |
| Vonage Holdings Corp. | 2.7% |
| World Fuel Services | 2.7% |
| Planet Fitness, Inc. | 2.6% |
| Atkore International Group | 2.6% |
Dividend Select
| JPMorgan Chase & Co. | 5.6% |
| Target Corporation | 5.0% |
| Microsoft Corporation | 4.4% |
| Marvell Technology Group | 4.3% |
| Comcast Corporation | 3.9% |
Mid Cap
| Cintas Corporation | 4.1% |
| CDW Corporation | 4.0% |
| Bright Horizons Family | 3.6% |
| NVR, Inc. | 3.4% |
| Amedisys, Inc. | 3.2% |
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.
