News & Our Thinking

Weekly Investor

Weekly Investor – November 16, 2020

16 November 2020

Stock Markets Hit All-Time Highs

Last week stock markets closed at all-time highs. Monday, equities had their biggest jump as the S&P 500® Index rallied over 2% at the open on news that Pfizer Inc.’s COVID-19 vaccine was 90% effective. The reopening trade drove the week’s performance as Marriott International, Inc., Live Nation Entertainment, Inc., Expedia Group, Inc., Norwegian Cruise Lines Holdings, Inc. and Carnival Corporation & Plc all traded up more than 15%. Value stocks rallied as lagging companies had renewed hope of returning to pre-pandemic operations. In general, those economically sensitive stocks received a significant boost with expectations that a safe and effective vaccine would offer relief from the stress of the COVID-19 pandemic.

Earnings season continued last week as 25 names in the S&P 500 announced quarterly results. The Walt Disney Company rallied 8.5% for the week. User growth for the company’s closely followed Disney+ streaming service beat analyst expectations. CVS Health Corporation announced third quarter results that bested expectations and the company raised its full year guidance. That helped boost the stock 9.3% last week. Cisco Systems, Inc. climbed 10.3% for the week after announcing quarterly sales and earnings above analyst expectations as well as boosting its sales estimates for next quarter.  This week investors will watch for further vaccine news, COVID-19 positivity rates and economic data on jobs, housing and manufacturing.

The S&P 500 Index was up 2.2% for the week. Its top-performing sectors were Energy (16.5%) and Financials (8.3%), while the bottom-performing sectors were Technology (-0.4%) and Consumer Discretionary (-1.1%). In the fixed-income market, the 10-year Treasury yield was up, ending at 0.9%.

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

Change Based Investment

Skyworks Solutions, Inc. provides semiconductors worldwide. Founded in 1962 and headquartered in Woburn, Massachusetts, Skyworks products support smartphones as well as tablet, automotive, broadband, cellular infrastructure and energy management applications.

Skyworks is well positioned to benefit from the expected transition to 5G (fifth-generation) smartphones. Because of the increased complexity of 5G smartphones, Skyworks has the potential to generate more profit from the upcoming transition to 5G technology. Additionally, the management team has a solid track record of executing on technology advancement. Skyworks also returns the majority of its excess capital back to shareholders in the form of dividends and share buybacks. While the impact of the coronavirus will likely push back the rollout of 5G communications across the globe, when that transition takes place we believe Skyworks will be a prime beneficiary. With the ability to generate additional profit from changes in smartphone technology along with a solid management team, Skyworks fits our Change-BasedSM investment process.

Top 5 Equity Holdings

Large Cap Growth

Alphabet, Inc.(Google) 6.7%
Apple, Inc. 6.6%
Target Corporation 5.7%
Danaher Corporation 5.6%
Mastercard Incorporated 5.3%

Small Cap Core

Medpace Holdings, Inc. 3.8%
OneMain Holdings, Inc. 3.3%
ASGN Incorporated 3.2%
Addus Homecare Corp. 2.8%
Fortinet, Inc. 2.8%

Dividend Select

Target Corporation 6.6%
Microsoft Corporation 5.9%
JPMorgan Chase & Co. 5.0%
Eaton Corporation Plc 3.9%
Comcast Corporation 3.7%

Mid Cap 

NVIDIA Corporation 5.4%
Cintas Corporation 4.5%
CDW Corporation 3.8%
Marvell Technology Group 3.7%
Zebra Technologies Corp. 3.7%

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.