Weekly Investor – November 30, 2020
Stocks on the Rise
Stocks rose last week. The S&P 500® Index gained 2.3% as the reopen trade continued. To date, aided by positive vaccine news, expectations that the economy will reopen has helped value stocks and stocks that are more economically sensitive. Last Monday, AstraZeneca PLC released phase 3 trial data on its COVID-19 vaccine that showed a 70% efficacy. This is the third vaccine announcement in the last few weeks, joining Pfizer Inc. and Moderna, Inc. That positive news drove the S&P 500® Value Index up 2.8%, while the S&P 500® Growth Index gained 1.5%.
Energy and financial stocks fueled the value index outperformance. Crude oil rallied 8.0% last week which buoyed the top-performing energy sector. Energy giants Occidental Petroleum Corporation, Apache Corporation and Pioneer Natural Resources Company were among the top ten stocks in the S&P 500, returning more than 14% for the week. Cruise lines participated in the reopen rally as well, with Carnival Corporation & Plc and Norwegian Cruise Line Holdings Ltd. gaining more than 14%. Equity markets celebrated the news that a Biden administration would likely nominate former Fed Chair Janet Yellen for its Treasury Secretary cabinet position. Yellen, who is viewed as a moderate, is expected to push for further government stimulus.
The S&P 500 Index was up 2.3% for the week. Its top-performing sectors were Energy (8.5%) and Financials (4.6%), while the bottom-performing sectors were Utilities (0.2%) and Real Estate (-0.4%). 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
Target Corporation is the second-largest general merchandise retailer in the United States, selling products through its physical stores as well as its digital channels. Based in Minneapolis, Minnesota, the company was founded in 1902 as Goodfellow Dry Goods.
Target is in the midst of several changes. It is resetting its pricing strategy to close the gap with Walmart, its biggest competitor, and is addressing its ecommerce needs by rolling out same-day delivery in selected markets around the country. Because of the coronavirus pandemic, Target is seeing increased grocery sales. Offsetting that are decreased sales in higher profit areas such as apparel. We think Target can navigate its way through today’s environment. For these reasons, we believe Target fits well with Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 6.7% |
| Apple, Inc. | 6.3% |
| Target Corporation | 6.2% |
| Mastercard Incorporated | 5.3% |
| Danaher Corporation | 5.1% |
Small Cap Core
| Medpace Holdings, Inc. | 3.8% |
| OneMain Holdings, Inc. | 3.5% |
| Fortinet, Inc. | 3.1% |
| Envestnet, Inc. | 3.0% |
| PetIQ, Inc. | 2.9% |
Dividend Select
| Target Corporation | 7.0% |
| Microsoft Corporation | 5.7% |
| JPMorgan Chase & Co. | 5.1% |
| Eaton Corporation Plc | 4.0% |
| Comcast Corporation | 3.8% |
Mid Cap
| NVIDIA Corporation | 5.2% |
| Cintas Corporation | 4.4% |
| Zebra Technologies Corp. | 3.9% |
| Marvell Technology Group | 3.8% |
| CDW Corporation | 3.6% |
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.
