Weekly Investor – December 30, 2019
Many Positives for 2020
Stocks climbed higher for the holiday-shortened week, propelling the Nasdaq Composite Index past 9,000 for the first time, as technology and consumer discretionary shares rose. Amazon.com, Inc. shares jumped after the e-commerce retailer said its holiday season was “record breaking.” Shares of Boeing Co, rose following the announcement that CEO Dennis Muilenburg resigned amidst continues issues linked to the 737 Max.
With a continued strong domestic economy, an improving global picture, an accomodative Fed and easing trade tensions, there are many positives going into 2020. While the last decade resulted in a handful of mega-caps contributing a large percentage to market gains, market leadership could shift to areas of the market that have not experienced as outsized of gains such as value, financial and smaller capitalization stocks.
In economic news, durable goods orders fell short of even the most pessimistic economist forecast due to a drip in aircraft orders, likely due to Boeing’s 737 Max problems, and on-going trade disputes. New-home sales also missed the mark but rose by 1.3% as interest rates and jobless rates remain near historic lows.
The S&P 500® Index was up 0.6% for the week. Its top-performing sectors were Consumer Discretionary (1.5%) and Technology (1.1%), while the bottom-performing sectors were Consumer Staples (0.2%) and Utilities (-0.2%). In the fixed-income market, the 10-year Treasury yield was unchanged, ending at 1.9%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Comcast Corporation, headquartered in Philadelphia, Pennsylvania is a telecommunications conglomerate serving both residential and commercial customers. Comcast owns many well-known companies such as Universal Studios and NBCUniversal. Comcast offers cable TV, internet, and home telephone services and produces feature films and television programs.
Comcast is experiencing growth in its internet business as it gains market share from traditional providers as customers place a higher emphasis on performance. Argent also sees opportunity given Comcast’s attractive valuation and its ability to increase profit margins. Given the positive changes of higher subscriber rates, increasing profit margins and an attractive valuation, we believe Comcast fits our 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. | 2.6% |
| UFP Technologies, Inc. | 2.5% |
Dividend Select
| JPMorgan Chase & Co. | 6.3% |
| Target Corporation | 5.4% |
| Microsoft Corporation | 4.6% |
| Comcast Corporation | 3.6% |
| Fidelity National Financial | 3.6% |
Mid Cap
| CDW Corporation | 4.5% |
| Cintas Corportaion | 3.8% |
| Amedisys, Inc. | 3.8% |
| 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.
