Weekly Investor – December 2, 2019
Stocks Close Higher
Stocks closed higher for the holiday-shortened week, helped by positive economic data-points and strength within the consumer discretionary sector. In economic news, U.S. gross domestic product (GDP) growth for the third-quarter was revised up to 2.1% versus a preliminary reading of 1.9%. In addition, durable goods orders grew by 0.6% versus an expected decline 0.9%.
Retail stocks were boosted by strong earnings from Best Buy Co., Inc. after the consumer-electronics retailer increased its forecast for the Christmas shopping season. Dick’s Sporting Goods, Inc. also beat expectations on strong same-store-sales growth and an improvement in profit margins. Both stocks gained over 10% for the week.
This week investors will be focused on commentary around Black Friday and Cyber Monday to gauge the strength of the consumer. Additionally, continuing trade negotiations with China will remain on investors’ minds, especially with the Hong Kong Human Rights and Democracy Act being signed into law by President Trump.
The S&P 500® Index was up 1.0% for the week. Its top-performing sectors were Consumer Discretionary (1.8%) and Technology (1.7%), while the bottom-performing sectors were Utilities (0.0%) and Energy (-1.5%). 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
Apple Inc. designs, manufactures and markets mobile communication and media devices, personal computers, portable digital music players and related products.
Apple stands to benefit from higher iPhone revenues, driven by demand for more expensive phones. Apple also had maintained strong growth in its high-margin services segment by generating revenue from offerings such as the App Store, iTunes, Apple Music, iCloud and Apple Pay, among others. We expect Apple will use its excess cash to generate shareholder value and fund new ventures, including its development of Apple TV. Given these positive changes, we believe Apple fits with Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.6% |
| Mastercard, Incorporated | 5.4% |
| Fiserv, Inc. | 5.3% |
| Target Corporation | 5.1% |
| Post Holdings, Inc. | 5.0% |
Small Cap Core
| Atkore International Group | 3.5% |
| Fortinet, Inc. | 3.0% |
| World Fuel Services | 2.7% |
| OneMain Holdings, Inc. | 2.7% |
| Callaway Golf Company | 2.5% |
Dividend Select
| JPMorgan Chase & Co. | 6.2% |
| Target Corporation | 5.4% |
| Microsoft Corporation | 4.5% |
| Marvell Technology Group | 4.3% |
| Fidelity National Financial | 3.9% |
Mid Cap
| CDW Corporation | 4.3% |
| Amedisys, Inc. | 3.8% |
| Cintas Corporation | 3.7% |
| Copart,Inc. | 3.4% |
| NVR, 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.
