Weekly Investor – August 31, 2020
Stocks Continue to Rise
Actions by the Federal Reserve last week gave the market a lift, as stocks continued to rise to record levels. In a shift from previous policy statements, Chairman Jerome Powell said the Fed would be more accommodative and let inflation and employment run at higher levels. For investors, that implied interest rates would remain low for an extended period.
Last Wednesday, Abbott Laboratories announced that the FDA had given the company’s $5 rapid result COVID-19 test the go-ahead to manufacture. The White House later announced it would buy 150 million tests after Abbott said its production would run at a rate of 50 million a month. Moderna, Inc. also announced positive phase 1 trial results for its COVID-19 vaccine. The vaccine produced consistently high levels of neutralizing antibodies in older adults. In other corporate news, MGM Resorts International announced it would lay off 18,000 employees, while The Coca-Cola Company is offering buyouts to 4,000 employees. Looking ahead, investors will be watching Biden and Trump policy statements closely. With the first debate scheduled for September 29, the two candidates have a month to hone their message coming into the Presidential Election on November 3, 2020.
The S&P 500® Index was up 3.3% for the week. Its top-performing sectors were Communication Services (4.8%) and Technology (4.5%), while the bottom-performing sectors were Health Care (1.0%) and Utilities (-0.6%). In the fixed-income market, the 10-year Treasury yield was up, ending at 0.7%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Danaher Corporation, headquartered in Washington, D.C., designs, manufactures and markets healthcare equipment. Its product line includes Life Sciences and Diagnostic tools and products.
Danaher has a long history of delivering consistent earnings growth by continually improving its business. The company also is adept at acquiring businesses that are fast-growing and improving the returns of those businesses. Over the years, Danaher’s management team has demonstrated skill and discipline in selecting and integrating its many purchases. Danaher’s management team has not been afraid to cull its businesses as well in order to drive shareholder value. For instance, in 2016, Danaher spun off its industrial businesses to shareholders as Fortive. In mid-2018, the company announced its intent to spin off its dental operations. These changes leave the stand-alone Danaher as a more focused healthcare organization with higher organic growth prospects. We believe Danaher’s management embraces Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Apple, Inc. | 7.2% |
| Alphabet, Inc. (Google) | 6.5% |
| Mastercard Incorporated | 6.1% |
| Target Corporation | 5.5% |
| Danaher Corporation | 5.2% |
Small Cap Core
| Medpace Holdings, Inc. | 3.9% |
| Fortinet, Inc. | 3.2% |
| PRA Group, Inc. | 3.0% |
| PRA Group, Inc. | 2.9% |
| UFP Industries, Inc. | 2.9% |
Dividend Select
| Microsoft Corporation | 6.7% |
| Target Corporation | 6.5% |
| JPMorgan Chase & Co. | 4.8 |
| Marvell Technology Group | 3.9% |
| Eaton Corporation Plc | 3.8% |
Mid Cap
| NVIDIA Corporation | 5.7% |
| Cintas Corporation | 4.5% |
| Marvell Technology Group | 3.5% |
| CDW Corporation | 3.5% |
| Ciena Corporation | 3.4% |
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.
