Weekly Investor – October 26, 2020
Largest Tech Names to Report Earnings
Stocks ended last week slightly down. Technology was the laggard sector in the S&P 500® Index, falling 2.2%, while the index as a whole declined 0.5%. Small cap stocks bucked the trend, outperforming their large cap peers, with the small cap Russell 2000® Index posting a gain of 0.4% last week on the strength of positive earnings results.
In positive news outside of stocks, renewed talks of a stimulus package had the market pointing upward last Friday. On the downside, a surge in positive COVID-19 tests in the Midwest at a rate three times worse than the Northeast, coupled with rising hospitalizations outside of the region, signaled the outbreak’s possible expansion. COVID-19 hospitalizations in New York topped 1,000 – the highest total since June.
Looking ahead for the week, the largest names in technology are set to report quarterly earnings. Investors will pay close attention to their results, as large tech stocks have driven the market over the past few years. On the economic calendar, new home sales and durable goods are announced today and Tuesday, respectively.
The S&P 500 Index was down 0.5% for the week. Its top-performing sectors were Communication Services (2.1%) and Utilities (1.2%), while the bottom-performing sectors were Consumer Staples (-1.4%) and Technology (-2.2%). In the fixed-income market, the 10-year Treasury yield was even, ending at 0.8%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Founded in 1975 and headquartered in Redmond, Washington, Microsoft Corporation develops, licenses and supports a range of software products, services and gaming platforms for computing devices worldwide.
Microsoft is well-positioned to continue growing as its customers shift their computing from on-site servers to Microsoft’s public cloud. We believe this change adds to Microsoft’s attractive profile making the stock an appropriate addition to Argent’s Large Cap Growth strategy.
Top 5 Equity Holdings
Large Cap Growth
| Apple, Inc. | 6.7% |
| Alphabet, Inc. (Google) | 6.5% |
| Target Corporation | 5.9% |
| Danaher Corporation | 5.9% |
| Mastercard Incorporated | 5.5% |
Small Cap Core
| Medpace Holdings, Inc. | 3.8% |
| OneMain Holdings, Inc. | 3.2% |
| Fortinet, Inc. | 3.2% |
| Addus Homecare Corp | 2.9% |
| Upland Software, Inc. | 2.9% |
Dividend Select
| Target Corporation | 6.7% |
| Microsoft Corporation | 6.2% |
| JPMorgan Chase & Co. | 4.7% |
| Eaton Corporation Plc | 3.9% |
| Life Storage, Inc. | 3.7% |
Mid Cap
| NVIDIA Corporation | 5.7% |
| Cintas Corporation | 4.4% |
| CDW Corporation | 3.8% |
| Marvell Technology Group | 3.7% |
| Zebra Technologies Corp. | 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.
