Weekly Investor – December 7, 2020
A Positive Backdrop for Stocks
Last week the S&P 500® Index gained 1.7%, as expectations of additional federal stimulus lent a positive backdrop for stocks. Optimism regarding COVID-19 vaccines has helped push stocks higher in the past few weeks. The S&P 500 rose 11% in November, its best month since April. The index is up 16.5% on a year-to-date basis and up 67.5% from its bottom on March 23. U.S. initial jobless claims of 712K were much lower than the consensus estimate of 775K and the previous week’s claims of 778K. Crude oil prices were down early in the week, but turned positive on Wednesday after reports that OPEC members discussed reversing production cuts over several months. Crude oil closed at $46.26 per barrel on Friday, rising 1.6% for the week. HollyFrontier Corporation, a refiner, was the best performing stock in the S&P 500 Index, returning 14.5% and energy was the top-performing sector. Salesforce.com, Inc., a customer relationship management software developer, was the worst-performing stock in the S&P 500 Index, falling 8.8%. The stock dropped after the company announced an agreement to acquire real-time messaging software company, Slack Technologies, Inc. Slack rose 5.2% last week and has climbed 37.6% since November 25 on rumors the two companies were in talks to finalize a deal. Earnings announcements expected this week include Adobe Inc., AutoZone, Inc., Broadcom Inc., Costco Wholesale Corporation and Oracle Corporation.
The S&P 500 Index was up 1.7% for the week. Its top-performing sectors were Energy (4.5%) and Health Care (2.8%), while the bottom-performing sectors were Consumer Discretionary (-0.4%) and Utilities (-2.2%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.0%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
The Walt Disney Company is a diversified international entertainment and media company with the following business segments: Media Networks, Studio Entertainment, Direct-to-Consumer & International, Parks and Experiences & Products. Some of the most recognized names under the Disney umbrella include: ESPN, ABC, Walt Disney World theme parks, 20th Century Fox and Pixar Animation Studios.
Disney has always held a strong base of diversified core assets but recently the company has begun to reposition its media networks away from the traditional cable bundle toward more online streaming services through the purchase of 20th Century Fox, a stake in Hulu and its successful launch of Disney +. This gives Argent confidence that Disney can stay as relevant in the future as it has been historically. Disney is feeling the negative effects of COVID-19, as its theme parks and sporting events were closed or shuttered over the last several months. As the economy re-opens we believe the changes going on in the company make Disney a good fit for our Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 6.7% |
| Apple, Inc. | 6.5% |
| Target Corporation | 5.9% |
| Mastercard Incorporated | 5.3% |
| Danaher Corporation | 5.2% |
Small Cap Core
| Medpace Holdings, Inc. | 4.1% |
| OneMain Holdings, Inc. | 3.4% |
| Fortinet, Inc. | 3.1% |
| Envestnet, Inc. | 3.0% |
| PetIQ, Inc. | 2.9% |
Dividend Select
| Target Corporation | 6.8% |
| Microsoft Corporation | 5.6% |
| JPMorgan Chase & Co. | 5.1% |
| Eaton Corporation Plc | 3.9% |
| Comcast Corporation | 3.8% |
Mid Cap
| NVIDIA Corporation | 5.3% |
| Cintas Corporation | 4.4% |
| Zebra Technologies Corp. | 3.9% |
| Marvell Technology Group | 3.6% |
| 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.
