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News & Our Thinking

Weekly Investor

Weekly Investor – October 14, 2019

15 October 2019

Earnings Season Begins

After three weeks of declines beginning in mid-September, the S&P 500® Index gained over a half percentage point last week. Concerns over U.S.-China trade talks pushed equities lower early in the week, as the S&P 500 fell almost 2.0% through Tuesday. However, equities began to trend upward by Wednesday, as optimism set in after reports that China would consider a limited trade deal if no additional tariffs were initiated by the United States. The S&P 500 climbed 2.7% the last three days of the week on continued positive news and reports that a partial agreement had been reached on Friday.

Apple Inc. returned 4.0% last week, hitting an all time-closing high and becoming the most valuable company in the U.S. Apple’s stock has outperformed the market in 2019 with a 51.0% year-to-date return. Earnings announcements expected this week include JPMorgan Chase & Co., Johnson & Johnson, Bank of America Corporation, The Coca-Cola Company, Wells Fargo & Company, UnitedHealth Group Incorporated, Citigroup Inc., Morgan Stanley, Netflix Inc. and many others.

The S&P 500® Index was up 0.6% for the week. Its top-performing sectors were Basic Materials (1.9%) and Industrials (1.5%), while bottom-performing sectors were Consumer Staples (-0.9%) and Utilities (-1.4%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.8%.

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


Change Based Investment

The Walt Disney Company is a diversified international entertainment and media company. Some of the most recognized names under the Disney umbrella include: ESPN, ABC, Walt Disney World theme parks, 20th Century Fox and Pixar Animation Studios.

Disney has always held a strong base of diversified core assets but recently Bob Iger, Disney’s CEO, has worked to reposition its media networks away from the traditional cable bundle toward more online streaming services through the purchase of 20th Century Fox and a stake in Hulu. This gives Argent confidence that Disney can stay as relevant in the future as it has been historically, Additionally, Disney has a robust film slate in the coming years. The company’s Parks division continues to capitalize on its studio success with the opening of new attractions such as Star Wars Lands and Marvel attractions, which should drive attendance and pricing. These positive changes to The Walt Disney Company make it a good fit for Argent’s Change-BasedSM investment approach.

 

Top 5 Equity Holdings


Large Cap Growth

Alphabet Inc. (Google) 7.6%
Mastercard, Inc. 5.5%
Fiserv, Inc. 5.2%
Post Holdings, Inc. 5.1%
Target Corporation 4.9%

Small Cap Core

Fortinet, Inc. 2.9%
Atkore International Group 2.8%
World Fuel Services 2.7%
Callaway Golf Company 2.6%
Upland Software, Inc. 2.5%

Dividend Select

JPMorgan Chase & Co. 5.7%
Target Corporation 5.1%
Microsoft Corporation 4.3%
Marvell Technology Group 4.1%
Comcast Corporation 3.9%

Mid Cap 

CDW Corporation 4.3%
Cintas Corporation 4.2%
NVR, Inc. 3.4%
Copart, Inc. 3.3%
Amedisys, Inc. 3.3%


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.