Weekly Investor – April 6, 2020
Coronavirus Cases Rise
Stocks continued falling last week as coronavirus cases surpassed one million globally. The economic impact is taking its toll with over 700,000 jobs lost in March. In addition, a record 6.6 million Americans applied for unemployment benefits last week.
Energy stocks were a bright spot with crude oil posting a record weekly gain of over 30%. President Trump is trying to broker a deal with Saudi Arabia and Russia to reduce global output by 10 million barrels a day. Even with the rise last week, energy stocks are down nearly 50% for the year. The OPEC+ meeting this week will be closely followed by investors. By contrast, Real Estate Investment Trusts (REITs) remain one of the hardest-hit areas of the market as many tenants are delaying or skipping payments. Looking ahead, the continued economic fallout from COVID-19 and the duration of the virus will be closely monitored by investors. In two weeks, investors will get a clearer picture of the economic impacts as money center banks and other large corporations begin to report quarterly results.
The S&P 500® Index was down 2.1% for the week. Its top-performing sectors were Energy (5.4%) and Consumer Staples (3.5%), while the bottom-performing sectors were Financials (-6.8%) and Utilities (-7.1%). In the fixed-income market, the 10-year Treasury yield was down, ending at 0.6%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Skyworks Solutions, Inc. provides semiconductors worldwide. Founded in 1962 and headquartered in Woburn, MA, Skyworks products support smartphones as well as tablet, automotive, broadband, cellular infrastructure and energy management applications.
Skyworks is well-positioned to benefit from the expected transition to 5G (fifth-generation) smartphones. Because of the increased complexity of 5G smartphones, Skyworks has the potential to generate more profit from the upcoming transition to 5G technology. Additionally, the management team has a solid track record of executing on technology advancement. Skyworks also returns the majority of its excess capital back to shareholders in the form of dividends and share buybacks. While the impact of the coronavirus likely will push back the rollout of 5G communications across the globe, when that transition takes place we believe Skyworks will be a prime beneficiary. With the ability to generate additional profit from changes in smartphone technology along with a solid management team, Skyworks fits out Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 8.3% |
| Mastercard Incorporated | 5.7% |
| Post Holdings, Inc. | 5.3% |
| Fiserv, Inc. | 5.2% |
| Apple, Inc. | 5.1% |
Small Cap Core
| Fortinet, Inc. | 3.8% |
| UFP Technologies, Inc. | 3.1% |
| Lumentum Holdings, Inc. | 3.1% |
| Upland Software, Inc. | 2.5% |
| Gibraltar Industries, Inc. | 2.4% |
Dividend Select
| Microsoft Corporation | 6.1% |
| Target Corporation | 5.4% |
| JPMorgan Chase & Co. | 5.3% |
| General Mills, Inc. | 4.8% |
| Life Storage, Inc. | 4.0% |
Mid Cap
| Amedisys, Inc. | 6.0% |
| NVIDIA Corporation | 4.2% |
| CDW Corporation | 4.1% |
| Ciena Corporation | 4.0% |
| Fidelity National Info. | 3.6% |
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.
