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Weekly Investor

Weekly Investor – November 9, 2020

09 November 2020

S&P Rises Amid Election Uncertainty

Last week, the S&P 500® Index had its best performance since early April, rising 7.3%. This was in contrast to the previous week when the index had its worst performance since late March. The week started with uncertainty for investors with the U.S. presidential election on Tuesday. That uncertainty was heightened as third quarter earnings announcements continued. Though the next U.S. president had yet to be determined, equities pushed higher throughout the week as the possibility of gridlock with the House and Senate remaining split between the two parties became more apparent to investors. Positive economic news last week included the ISM Manufacturing Index reporting its highest level since September 2018. In addition, the jobless rate continued to decline, currently standing at 6.9%.

All sectors were positive last week, driven by Information Technology. Technology company Arista Networks, Inc. rose nearly 26% last week after posting better-than-expected quarterly results. Other technology stocks that did well last week included semiconductor stocks Lam Research Corporation, Microchip Technology Incorporated, Applied Materials, Inc., QUALCOMM Incorporated, KLA Corporation and NVIDIA Corporation. Earnings announcements expected this week include The Walt Disney Company, McDonald’s Corporation, Cisco Systems, Inc., Applied Materials, Inc. and many others.

The S&P 500 Index was up 7.3% for the week. Its top-performing sectors were Technology (9.7%) and Health Care (8.3%), while the bottom-performing sectors were Utilities (2.8%) and Energy (0.8%). In the fixed-income market, the 10-year Treasury yield was down, ending at 0.8%.

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

Change Based Investment

Post Holdings, Inc. is a consumer packaged goods company that operates in the United States and internationally. The company was founded in 1897 and is based in St. Louis, Missouri. The company has many recognizable brands such as Grape-Nuts, Weetabix, Bob Evans Farms and Raisin Bran.

We think highly of Post’s management team and its ability to drive value creation for shareholders. The management team has successfully executed a number of acquisitions, divestitures and joint ventures which have boosted returns to the company. While Post’s food service segment is negatively affected by COVID-19, we believe the company’s creativity and focus on driving returns make Post a core holding for Argent’s Change-BasedSM investment approach for long-term investors.

Top 5 Equity Holdings

Large Cap Growth

Alphabet, Inc.(Google) 6.9%
Apple, Inc. 6.7%
Danaher Corporation 6.1%
Target Corporation 5.8%
Mastercard Incorporated 5.1%

Small Cap Core

Medpace Holdings, Inc. 3.9%
OneMain Holdings, Inc. 3.1%
Addus Homecare Corp. 3.1%
Upland Software, Inc. 3.0%
Fortinet, Inc. 2.9%

Dividend Select

Target Corporation 6.8%
Microsoft Corporation 6.4%
JPMorgan Chase & Co. 4.7%
Eaton Corporation Plc 3.9%
Life Storage, Inc. 3.7%

Mid Cap 

NVIDIA Corporation 6.0%
Cintas Corporation 4.4%
Marvell Technology Group 3.9%
CDW Corporation 3.9%
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.