News & Our Thinking

Weekly Investor

Weekly Investor – October 12, 2020

12 October 2020

Earnings Seasons Kicks into Gear

The S&P 500® Index rose 3.8% last week, its best performance since early July. October has been a nice contrast to a disappointing September. After recording an all-time high on September 2, the index slid over the following three weeks to end the month down 3.8%, its first negative monthly return since March of this year. Equities opened higher last Monday on news that President Trump was recovering from COVID-19. The positive trend was reversed Tuesday when the President tweeted he was stopping stimulus negotiations until after the election. Trump’s tweet caused the market to fall over 2% in the last hours of trading. Stocks then headed back up on Wednesday on hopes that some stimulus could still occur, as the President encouraged lawmakers to provide immediate aid for the airline industry, small businesses and $1,200 stimulus checks for jobless Americans.

All sectors rose last week, with Materials and Energy leading the way. Information technology company Xilinx, Inc. posted the best performance last week, rising 17.9%. The stock jumped Friday on news that Advanced Micro Devices, Inc. was in talks to acquire the company. On the downside, Domino’s Pizza, Inc. posted the worst performance, falling 9.9%. The stock dropped on Thursday after missing earnings estimates. Earnings season kicks into gear this week with Johnson & Johnson, UnitedHealth Group Incorporated, JPMorgan Chase & Co., Bank of America Corporation, Honeywell International Inc., Wells Fargo & Company and many other companies expected to report results.

The S&P 500 Index was up 3.8% for the week. Its top-performing sectors were Basic Materials (5.1%) and Energy (5.0%), while the bottom-performing sectors were Communication Services (2.2%) and Real Estate (1.4%). In the fixed-income market, the 10-year Treasury yield was up, ending at 0.8%.

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

Change Based Investment

Marvell Technology Group Ltd. designs, develops and markets semiconductors. Marvell is the market leader in data storage solutions. Customers include computer manufacturers, automobile makers, major mobile networks and internet retail and server sites. Marvell was founded in 1995 and is headquartered in Hamilton, Bermuda

In 2016 an activist investor installed Matt Murphy as Marvell’s CEO. Murphy quickly put together a new management team of successful industry veterans. Since Murphy’s arrival, Marvell has delivered significant improvements to profits by implementing discipline on costs and product portfolios and focus on research and development spending. In 2018, Marvell acquired Cavium. In 2019, Marvell acquired Aquantia and Avera. These acquisitions broadened Marvell’s end markets and increased the company’s growth rate. Given these changes, we believe Marvell fits Argent’s Change-BasedSM investment approach.


Top 5 Equity Holdings

Large Cap Growth

Apple, Inc. 6.7%
Alphabet, Inc. (Google) 5.9%
Target Corporation 5.9%
Mastercard Incorporated 5.8%
Danaher Corporation 5.6%

Small Cap Core

Medpace Holdings, Inc. 4.0%
OneMain Holdings, Inc. 3.1%
Fortinet, Inc. 3.1%
Gibraltar Industries, Inc. 3.1%
Upland Software, Inc. 2.8%

Dividend Select

Target Corporation 6.8%
Microsoft Corporation 6.1%
JPMorgan Chase & Co. 4.6%
Eaton Corporation Plc 3.8%
Life Storage, Inc. 3.6%

Mid Cap 

NVIDIA Corporation 5.7%
Cintas Corporation 4.4%
Marvell Technology Group 4.0%
CDW Corporation 3.6%
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.