Weekly Investor – September 30, 2019
Headlines Rule the Week
Political headlines drove daily moves in stocks last week. Concerns over trade and talk of impeachment gained top billing, as the S&P 500® Index closed the week down almost 1.0%. Last week FedEx cut its profit outlook due to “increasing trade tensions and policy uncertainty.” On the back of the cautious outlook for profits for the third quarter is the potential of a fourth-quarter trade deal with China. A deal by the end of the year could provide an uplift in 2020 to those impacted companies.
Looking ahead to this week, investors will be focused on any news coming out of Washington and how it may affect the stability of the financial markets. On the economic front, the Institute for Supply Management (ISM) will be releasing multiple economic indicators as well as the release of mortgage applications and the jobs number.
The S&P 500® Index was down 1.0% for the week. Its top-performing sectors were Utilities (1.3%) and Consumer Staples (1.2%), while bottom-performing sectors were Energy (-2.6%) and Health Care (-3.0%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.7%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
SunTrust Banks, Inc. is a regional bank that provides a variety of financial services for consumers, businesses, corporations and institutions in the United States, with a focus on the Southeast and Mid-Atlantic regions of the country, The company was founded in 1891 and is headquartered in Atlanta, Georgia.
SunTrust has a strong management team focused on improving operational efficiency to lower costs and drive growth. In addition, a strong balance sheet allows SunTrust to return a significant amount of capital to its shareholders via dividend increases and share buybacks. In February 2019, SunTrust and BB&T Corporation, a regional bank base in Winston-Salem, NC, announced a merger that would create the six-largest U.S. bank based on assets and deposits. SunTrust/BB&T anticipates that its enhanced scale will allow it to focus on best of breed systems and processes in order to drive a competitive advantage. Additionally, the combined company will be able to leverage complementary businesses in an attempt to generate additional sales. For these reasons, we believe the combined SunTrust/BB&T offers upside potential for our clients.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.7% |
| Mastercard, Inc. | 5.4% |
| Post Holdings, Inc. | 5.3% |
| Fiserv, Inc. | 5.1% |
| Marvell Technology Group | 4.8% |
Small Cap Core
| Fortinet, Inc. | 2.8% |
| Atkore International Group | 2.7% |
| World Fuel Services | 2.7% |
| Callaway Golf Company | 2.5% |
| OneMain Holdings, Inc. | 2.5% |
Dividend Select
| JPMorgan Chase & Co. | 5.8% |
| Target Corporation | 4.8% |
| Microsoft Corporation | 4.3% |
| Marvell Technology Group | 4.2% |
| Comcast Corporation | 3.8% |
Mid Cap
| CDW Corporation | 4.2% |
| Cintas Corporation | 4.2% |
| NVR, Inc. | 3.4% |
| Copart, Inc. | 3.2% |
| 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.
