Weekly Investor – November 18, 2019
Earnings Season Winding Down
The S&P 500® Index hit all-time highs last week and is up 26.7% for the year. If the market can hold this level, 2019 would be the third-best total return for the index since 2000. U.S.-China trade relations continue to grab headlines. To start last week, worries arose that the first phase of a trade deal may have hit some snags. However, by the end of the week those worries diminished as White House economic advisor Larry Kudlow stated that phase one was “…coming down to the short strokes,” while Commerce Secretary WIlbur Ross said “in all likelihood” there will be a deal.
Earnings season for 3Q19 continued to wind down last week as only 15 names in the S&P 500 announced results, including a few mega-cap names. Walmart Inc. announced earnings above estimates. Its stock was down 0.5% last week however, as investors worried about a slowdown in Sam’s Club revenue. Looking to this week, investors likely will focus on economic data. Releases are expected in housing, leading indicators, consumer sentiment and jobs. These all are direct measures of consumer health, which has been the cornerstone of the recent market rally.
The S&P 500® Index was up 0.9% for the week. Its top-performing sectors were Health Care (2.4%) and Real Estate (1.9%), while the bottom-performing sectors were Financials (-0.3%) and Energy (-1.3%). In the fixed-income market, the 10-year Treasury yield was down, ending at 1.8%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Founded in 1930, AMETEK, Inc. is a U.S.-based manufacturer of electronic instruments and electromechanical devices. The company operates through two business segments supplying devices to the medical (quality control equipment), energy (temperature measurement and calibration instruments), industial (battery chargers and UPS systems) and aerospace and defense (engine sensors, cockpit indicators, and display systems) markets.
Over and above trading at an attractive valuation, we believe AMETEK’s acquisitions in technology will make the company’s manufacturing more efficent and will be a catalyst for growth. Because of AMETEK’s attractive valuation and acquisition strategy designed to increase efficiency and grow shareholder value, we believe AMETEK fits our Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.9% |
| Fiserv, Inc. | 5.3% |
| Mastercard, Inc. | 5.3% |
| Post Holdings, Inc. | 5.1% |
| Marvell Technology Group | 4.9% |
Small Cap Core
| Fortinet, Inc. | 3.5% |
| Atkore International Group | 3.1% |
| World Fuel Services | 2.8% |
| OneMain Holdings, Inc. | 2.6% |
| Callaway Golf Company | 2.5% |
Dividend Select
| JPMorgan Chase & Co. | 6.1% |
| Target Corporation | 4.9% |
| Microsoft Corporation | 4.4% |
| Marvell Technology Group | 4.4% |
| Fidelity National Financial | 3.9% |
Mid Cap
| CDW Corporation | 4.4% |
| Cintas Corporation | 3.8% |
| Amedisys, Inc. | 3.6% |
| Copart,Inc. | 3.3% |
| NVR, 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.
