Weekly Investor – September 14, 2020
S&P Down for the Week
The S&P 500® Index returned -2.5% last week. The index has recorded gains for five consecutive months through August and is up 4.8% year-to-date. However, the first two weeks of September have trended down with the index currently down 4.5% for the month.
Crude oil closed at $37.33 per barrel on Friday, declining 6.1% for the week. This is the second straight week of losses, marking the largest two-week decline since April. Energy stocks were under pressure posting the worst sector performance in the S&P 500 Index for the last two weeks and is the only sector in the index to be in negative territory during the third quarter of 2020. Information Technology also suffered last week due to Apple, Inc., the largest weight in the S&P 500 Index, declining 7.4% and Microsoft Corporation declining 4.8%. Semiconductor equipment stocks Lam Research Corporation, KLA Corporation, and Applied Materials, Inc., were the worst-performing stocks in the sector, returning -11.8%, -11.1%, and -9.8% respectively. Tapestry, Inc., a premium fashion designer with brands such as Coach, Kate Spade, and Stuart Weitzman, took the top spot in the index returning 10.9%. Tesla, Inc., the electric vehicle innovator that is up 345% in 2020, had its worst day ever on Tuesday declining 21.1%. Many investors had speculated that the stock would be added to the S&P 500 Index, but the index committee chose to add Etsy, Inc., Teradyne, Inc., and Catalent, Inc., to replace H&R Block, Inc., Coty Inc., and Kohl’s Corporation.
The S&P 500 Index was down 2.5% for the week. Its top-performing sectors were Basic Materials (0.8%) and Industrials (-0.3%), while the bottom-performing sectors were Technology (-4.4%) and Energy (-6.4%). In the fixed-income market, the 10-year Treasury yield was even, ending at 0.7%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Fiserv 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 potential brought about from the First Data acquisition, Fiserv fits with Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Apple, Inc. | 6.8% |
| Alphabet, Inc. (Google) | 6.3% |
| Mastercard Incorporated | 5.8% |
| Target Corporation | 5.7% |
| Danaher Corporation | 5.4% |
Small Cap Core
| Medpace Holdings, Inc. | 3.7% |
| Fortinet, Inc. | 3.0% |
| Addus Homecare Corp. | 2.9% |
| OneMain Holdings, Inc. | 2.8% |
| Gibraltar Industries, Inc. | 2.8% |
Dividend Select
| Target Corporation | 6.5% |
| Microsoft Corporation | 6.1% |
| JPMorgan Chase & Co. | 4.8 |
| Eaton Corporation Plc | 3.8% |
| Comcast Corporation | 3.7% |
Mid Cap
| NVIDIA Corporation | 5.5% |
| Cintas Corporation | 4.5% |
| Marvell Technology Group | 3.7% |
| CDW Corporation | 3.5% |
| NVR, Inc. | 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.
