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Weekly Investor

Weekly Investor – July 27, 2020

27 July 2020

Initial Jobless Claims Higher

The S&P 500® Index fell last week after three straight weeks of gains. With the run in the market in July the index is in positive territory on a year-to-date basis, digging out of the steep declines in February and March. Last Thursday stocks fell with Information Technology, Consumer Discretionary and Communication Services sectors being the hardest hit. Negative jobs data, along with increasing COVID-19 cases raised concerns of the economic rebound potentially stalling. U.S. initial jobless claims of 1.42 million were higher than expectations, marking the first increase in jobless claims since the high of 6.87 million at the end of March, breaking a 15-week stretch of declines.

In stock news, Intel Corporation fell 15.7% last week. Although the company had positive earnings, Intel delivered negative news, delaying production of its next-generation semiconductors another six months because of manufacturing issues. Homebuilders PulteGroup, Inc. and NVR, Inc. rose 14.3% and 14.0% respectively as the companies announced increases in second quarter orders. New home sales increased to 776K, the highest annualized rate since July 2007. The earnings calendar will be full this week, including Apple, Inc., Amazon.com, Inc., Alphabet, Inc., Advanced Micro Devices, Inc., Facebook, Inc., MasterCard Incorporated, PayPal Holdings, Inc., Pfizer, Inc., The Procter & Gamble Company, Visa, Inc. and many others.

The S&P 500 Index was down 0.3% for the week. Its top-performing sectors were Energy (2.1%) and Consumer Discretionary (1.3%), while the bottom-performing sectors were Communication Services (-1.1%) and Technology (-1.5%). In the fixed-income market, the 10-year Treasury yield was even, ending at 0.6%.

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


Change Based Investment

Carlisle Companies Incorporated operates as a global diversified manufacturing company. It designs, manufactures and markets a wide range of products that serve a broad range of niche markets including commercial roofing, lawn and garden, mining and construction equipment, aerospace and electronics, energy, agriculture, food delivery and healthcare.

The company had a significant transformation over the years. As a result of this change, Carlisle is well-positioned to grow in its markets and make small acquisitions to augment its organic growth. After headwinds from tariffs and cost pressures, the stock is trading at a depressed valuation. Skepticism from COVID-19 on the strength of the commercial building market has impacted Carlisle’s operations in the short-term. Longer term, the company’s growth potential, high barriers to entry and compelling valuation make Carlisle Companies a good fit for Argent’s Change-BasedSM  investment approach.

 

Top 5 Equity Holdings


Large Cap Growth

Alphabet, Inc. (Google) 8.7%
Apple, Inc. 5.9%
Mastercard Incorporated 5.6%
Danaher Corporation 5.4%
Target Corporation 5.0%

Small Cap Core

Fortinet, Inc. 3.5%
Medpace Holdings, Inc. 3.4%
PetIQ, Inc. 3.1%
Lumentum Holdings, Inc 2.8%
UFP Industries, Inc. 2.8%

Dividend Select

Microsoft Corporation 6.3%
Target Corporation 5.7%
JPMorgan Chase & Co. 4.9
Marvell Technology Group 3.8%
Comcast Corporation 3.8%

Mid Cap 

NVIDIA Corporation 4.9%
Cintas Corporation 4.5%
Ciena Corporation 3.9%
CDW Corporation 3.8%
Marvell Technology Group 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.