News & Our Thinking

Weekly Investor

Weekly Investor – October 28, 2019

29 October 2019

All Time Highs

The S&P 500® Index closed near a record high last Friday after news of a constructive phone call between Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He temporarily lifted the index into record territory. Technology stocks led the index on Friday after positive news from Intel Corp., while Apple Inc. hit an all-time high. reported much lower than expected earnings but stayed upbeat on the future of the company.

Regionally, on the West Coast, California wildfires have triggered a state of emergency. Utility company PG&E has announced plans to cut electricity to 850,000 customers in the affected areas as ferocious winds have increased the rise of electrical fires. In the Midwest, General Motors employees ratified the labor agreement that was reached with the Unite Auto Workers. The latest GM strike has cost the company almost 2 billion dollars. Looking ahead, the strength of the consumer will be in focus as wholesale and retail inventories are released on Monday with home sales and mortgage applications coming on Tuesday and Wednesday.

The S&P 500® Index was up 1.2% for the week. Its top-performing sectors were Energy (4.3%) and Technology (2.5%), while bottom-performing sectors were Consumer Discretionary (-0.8%) and Real Estate (-1.1%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.8%.

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

Change Based Investment

V.F. Corporation designs, produces, procures, markets and distributes branded lifestyle apparel, footwear and related products worldwide. The company has more than 30 brands, including The North Face, Vans, Red Kap, Williamson Dickie and Timberland. The company was founded in 1899 and is based in Greensboro. North Carolina.

V.F, Corporation has a proven track record of successful mergers and acquisitions in footwear and apparel. The company has consistently purchased brands at reasonable prices, increased their profitability, and in some cases, it has grown those brands for decades. After several years of declining sales, V.F. is selectively repositioning its brands, with the biggest change- a spin-off of Wrangler and Lee into a separately traded company, Kontoor Brands. This change should result in higher growth and provide additional flexibility for V.F. to pursue more profitable acquisitions. We believe this position change, along with the company’s strong management team, provides a long runway for growth.


Top 5 Equity Holdings

Large Cap Growth

Alphabet Inc. (Google) 7.8%
Mastercard, Inc. 5.3%
Post Holdings, Inc. 5.1%
Fiserv, Inc. 5.0%
Target Corporation 4.7%

Small Cap Core

Atkore International Group 3.0%
Fortinet, Inc. 2.9%
World Fuel Services 2.7%
Callaway Golf Company 2.7%
OneMain Holdings, Inc. 2.4%

Dividend Select

JPMorgan Chase & Co. 6.1%
Target Corporation 4.9%
Microsoft Corporation 4.3%
Marvell Technology Group 4.2%
Comcast Corporation 3.9%

Mid Cap 

CDW Corporation 4.2%
Cintas Corporation 4.2%
NVR, Inc. 3.5%
Copart, Inc. 3.4%
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.