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Weekly Investor

Weekly Investor – February 18, 2020

18 February 2020

Impact of Coronavirus Continues

Economic acceleration and Coronavirus headlines in China were the two drivers of the U.S. market last week. The S&P 500® Index rose by 1.7% even though a revised methodology to diagnose the Coronavirus increased the number of confirmed cases considerably. The yin and yang of the impact of the Coronavirus continues to play out. Some market participants are looking for a stagnation of growth, white data indicates that the economy continues to expand. Oil prices rebounded last week after dropping from a high of over $63 in early January to under $50 last Monday. Crude rallied during the week, closing higher each day to finish the week over $52 a barrel.

In stocks, The Kraft Heinz Company is the latest mega-merger to fail to put the pieces together to form a cohesive unit. Kraft Heinz’s debt was downgraded to junk by two credit rating agencies giving Warren Buffett, a large investor in the company, a rare blemish to his long history of performance. Semiconductor manufacturer NVIDIA Corporation reported fourth-quarter results on Friday that beat analyst expectations and sent the stock to an all-time high. Demand for chips used in data centers drove results. T-Mobile U.S, Inc. also rose last week after the service provider announced it was looking to renegotiate the takeover of Sprint Corporation. T-Mobile’s share price dropped steadily since the deal was announced in April 2018.

Looking ahead this week, housing numbers and the Federal Reserve Open Market Committee (FOMC) meeting minutes are set to be released on Wednesday, followed by jobs data on Thursday. Quarterly earnings season will wind down with 51 companies in the S&P 500 expected to report.

The S&P 500 Index was up 1.7% for the week. Its top-performing sectors were Real Estate (4.8%) and Consumer Discretionary (2.6%), while the bottom-performing sectors were Financials (0.7.%) and Energy (0.3%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.6%.

We continue to seek companies that reflect our Change-BasedSM investment approach.


Change Based Investment

Fiserv, Inc. is a financial technology firm headquartered in Brookfield, Wisconsin. The company serves the financial services industry, driving innovation in payments, processing services, risk and compliance, and customer and channel management.

Fiserv has a solid track record of executing on mergers and acquisitions while it has consistently delivered mid-single digit organic sales growth. Argent believes Fiserv’s acquisition of First Data, a payment processing company. will allow the company to realize cost savings and expand its portfolio of services to existing customers. Because of the company’s history of execution and the upside of potential brought about from the First Data acquisition, Fiserv fits with Argent’s Change-BasedSM investment approach.

 

Top 5 Equity Holdings


Large Cap Growth

Alphabet Inc. (Google) 8.4%
Mastercard, Incorporated 5.9%
Fiserv, Inc. 5.3%
Apple, Inc. 4.9%
Post Holdings, Inc. 4.7%

Small Cap Core

Fortinet, Inc. 3.4%
Atkore International Group 3.0%
OneMain Holdings, Inc. 3.0%
UFP Technologies, Inc. 2.6%
Upland Software, Inc. 2.6%

Dividend Select

JPMorgan Chase & Co. 6.3%
Microsoft Corporation 5.3%
Target Corporation 4.9%
Life Storage, Inc. 3.8%
Eaton Corporation Plc 3.7%

Mid Cap 

Amedisys, Inc. 4.4%
CDW Corporation 4.2%
Cintas Corporation 4.1%
Copart, Inc. 3.7%
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.