Weekly Investor – June 29, 2020
Choppy Week for Stocks
The S&P 500® Index fell 2.9% last week. So far in the month of June, the index has declined 1.0%. On a year-to-date basis, the S&P 500 is down 6.0%. Stocks had a positive start to the week, but last Wednesday the index dropped 2.6% on concerns of rising COVID-19 cases. Investors worry as some states evaluate their reopening strategies. Equities rallied on Thursday, led by financial stocks, as some back regulations were eased. However, the market was pressured again on Friday as virus cases jumped in the south.
In stock news, The Gap, Inc. was the best performer in the S&P 500 Index, rising 13.2% for the week. The stock climbed Friday after news of a multiyear partnership deal with rapper Kanye West. The Gap had been on a decline since early 2018 and was down over 41.0% year-to-date prior to Friday’s announcement. Social media companies Facebook, Inc. and Twitter,Inc. dropped 9.5% and 13.1% respectively last week. The stocks declined after The Unilever Group, the food and personal care products giant, announced Friday that it was halting all U.S. advertising on both platforms for the rest of the year, citing hate speech and other polarizing posts by users. This raised concerns for the social media companies that others may also boycott them. American Airlines Group, Inc. was the worst-performing stock in the S&P 500, falling 22.6% for the week. Cruise lines also declined, as COVID-19 concerns pressured travel stocks. Second quarter earnings announcements begin this week with Micron Technology, Inc., General Mills, Inc., FedEx Corporation, Constellation Brands, Inc., Conagra Brands, Inc., among others.
The S&P 500 Index was down 2.9% for the week. Its top-performing sectors were Technology (-0.4%) and Consumer Discretionary (-1.9%), while the bottom-performing sectors were Financials (-5.3%) and Energy (-6.4%). 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
Apple, Inc. designs, manufactures and markets mobile communication and media devices, personal computers, portable digital music players and related products.
Apple stands to benefit from higher iPhone revenues, driven by demand for more expensive phones. Apple also has maintained strong growth in its high-margin Services segment by generating revenue from offerings such as the App Store, iTunes, Apple Music, iCloud and Apple Pay, among others. We expect Apple will use its excess cash to generate shareholder value and fund new ventures, including its development of Apple TV. Given these positive changes, we believe Apple fits with Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc. (Google) | 8.4% |
| Apple, Inc. | 6.1% |
| Mastercard Incorporated | 5.7% |
| Danaher Corporation | 5.1% |
| Target Corporation | 4.1% |
Small Cap Core
| Fortinet, Inc. | 3.9% |
| PetIQ, Inc. | 3.2% |
| Medpace Holdings, Inc. | 3.1% |
| UFP Technologies, Inc. | 3.0% |
| Lumentum Holdings, Inc. | 2.7% |
Dividend Select
| Microsoft Corporation | 6.5% |
| Target Corporation | 5.7% |
| JPMorgan Chase & Co. | 4.9 |
| Marvell Technology Group | 3.8% |
| Comcast Corporation | 3.6% |
Mid Cap
| NVIDIA Corporation | 4.7% |
| Cintas Corporation | 4.2% |
| Ciena Corporation | 4.0% |
| CDW Corporation | 3.9% |
| Marvell Technology Group | 3.7% |
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.
