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Weekly Investor

Weekly Investor – January 13, 2020

13 January 2020

Earnings Season Begins

The S&P 500® Index returned 0.9% last week, setting an all-time high. This was in the face of heightened U.S.-Iranian hostilities, as Iran fired some 15 ballistic missiles at the U.S. and coalition forces in Iraq. While 10 of the missiles hit a U.S. base, no Americans were killed. On Friday, the U.S. announced further sanctions on Iranian metal exports along with sanctions on more leaders of the embattled country.

In stock news, Walgreens Boots Alliance Inc. announced quarterly results last week as revenue and earnings came in below analyst estimates which caused the stock to drop over 8% for the week. Management blamed most of the under performance on weakness in its Medicaid business. Energy exploration and production company Apache Corp. shot up nearly 27% Tuesday, its biggest daily gain in nearly 50 years, after announcing a significant oil discovery off Suriname’s coast. Looking ahead to this week, Wall Street heads into quarterly earnings season as 26 names in the S&P 500 are expected to report results. They include mega-cap banks JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co., Bank of America Corp., U.S. Bancorp and Goldman Sachs Group Inc. along with health insurance giant UnitedHealth Group Inc.

The S&P 500® Index was up 0.9% for the week. Its top-performing sectors were Techonology (2.2%) and Communication Services (2.0%), while the bottom-performing sectors were Basic Materials (-0.3%) and Energy (-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

Crown Castle International Corp. operates as a real estate investment trust. Crown Castle owns, operates and leases cell towers and other infrastructure for wireless communications. The company was founded in 1994 and is headquartered in Houston, TX.

Recently, Crown Castle took a different strategy than its main competitors. In addition to owning cell towers, Crown Castle began investing in small cell and fiber networks–a new way of expanding its wireless coverage. This change is important as wireless carriers roll out new 5G infrastructure (the next generation of wireless connectivity). With the build-out of the 5G market, increasing demand for small cell networks and Crown Castle’s record of solid execution, we believe the company has a long runway for sustainable sales and dividend growth.

 

Top 5 Equity Holdings


Large Cap Growth

Alphabet Inc. (Google) 8.0%
Mastercard, Incorporated 5.5%
Fiserv, Inc. 5.2%
Target Corporation 4.9%
Post Holdings, Inc. 4.8%

Small Cap Core

Fortinet, Inc. 3.2%
Atkore International Group 3.0%
World Fuel Services 2.7%
Callaway Golf Company 2.6%
OneMain Holdings, Inc. 2.5%

Dividend Select

JPMorgan Chase & Co. 6.2%
Target Corporation 5.3%
Microsoft Corporation 4.7%
Fidelity National Financial 3.7%
ConocoPhillips 3.6%

Mid Cap 

CDW Corporation 4.4%
Cintas Corportaion 3.9%
Amedisys, Inc. 3.9%
Copart, Inc. 3.5%
Helen of Troy Limited 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.