Weekly Investor – December 23, 2019
More All-Time Highs
Stocks closed out last week at all-time highs. On a year-to-date basis the S&P 500® Index has returned over 31%. rose last week. Although stocks are at a record highs, the news out of Washington is hitting new lows. On Wednesday, President Trump became the third president to be impeached in our country’s 243-year history. The official start date of the Senate trial is in negotiation between the House and Senate leaders due to a standoff over the trial procedure. Despite the political dealings on impeachment, U.S. lawmakers were able to pass spending bills to avoid a partial government shutdown. In addition, on Friday, Speaker Pelosi invited President Trump to deliver the State of the Union address.
Turning to stocks, Conagra Brands reported earnings last week and the stock closed out the week up 23.5%. Trade-sensitive stocks, such as US Steel, Navistar, and Cummins, all announced job cuts and downgrades to their 2020 outlooks in a sign that the postponed trade deals are hurting the industries they were designed to protect. Looking ahead to this week, Monday’s releases include durable goods orders and home sales data followed by Christmas amid what will likely be very light trading volume.
The S&P 500® Index was up 1.7% for the week. Its top-performing sectors were Utilities (2.7%) and Real Estate (2.7%), while the bottom-performing sectors were Financials (0.5%) and Industrials (0.3%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.9%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Centene Corporation is a major health insurance company, based in St. Louis, Missouri. Centene’s main lines of business are government health care plans including Medicare, Medicaid, The Health Insurance Marketplace System and Tricare.
Centene continues to have a strong growth outlook as a leading managed care company. Centene recently announced the acquisition of Wellcare, another managed care company. Although still under regulatory review, the acquisition of Wellcare will strengthen and expand Centene’s positions in both Medicaid and Medicare. Additionally, worries over the uncertainty of health care reform have resulted in a compelling valuation for Centene. The attractive valuation of Centene against the backdrop of strong industry fundamentals makes Centene a good fit for Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.6% |
| Mastercard, Incorporated | 5.4% |
| Fiserv, Inc. | 5.2% |
| Target Corporation | 5.1% |
| Post Holdings, Inc. | 4.9% |
Small Cap Core
| Fortinet, Inc. | 3.0% |
| Atkore International Group | 2.9% |
| World Fuel Services | 2.7% |
| OneMain Holdings, Inc. | 2.7% |
| UFP Technologies, Inc. | 2.6% |
Dividend Select
| JPMorgan Chase & Co. | 6.3% |
| Target Corporation | 5.5% |
| Microsoft Corporation | 4.5% |
| Fidelity National Financial | 3.6% |
| Comcast Corporation | 3.5% |
Mid Cap
| CDW Corporation | 4.5% |
| Cintas Corportaion | 3.8% |
| Amedisys, Inc. | 3.7% |
| Copart, Inc. | 3.3% |
| 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.
