Weekly Investor – February 1, 2021
S&P Down for the Week
The S&P 500® Index fell 3.3% last week as volatility in equities jumped to its highest level since late October, driving the worst performance for the index in the past three months. Heavily shorted stocks such as GameStop Corp. and AMC Entertainment Holdings, Inc., which shot up 400% and 278% respectively, made for headlines throughout last week. Speculation that hedge funds were covering their short positions by selling other stocks caused downward pressure on the equity markets. The SEC said it would look into behavior by any regulated entity that demonstrated abusive activity in an effort to protect retail investors. All sectors declined for the week, with the Energy sector leading the market downward. Iron Mountain Incorporated, a specialty REIT, was the best stock in the S&P 500 Index, rising 11.7% for the week. The company rallied along with other shorted stocks. Western Digital Corporation, a provider of computer hardware and storage, rose 11.3% last week as the company reported better-than-expected earnings. Other big names whose earnings positively surprised included Apple, Inc., Facebook, Inc., Microsoft Corporation and Visa Inc. Tesla, Inc. bucked the trend, reporting earnings that missed Wall Street estimates. Teradyne Inc., a manufacturer of semiconductor testing equipment, was the worst stock in the S&P 500 for the week, falling 17.7%. Teradyne declined after announcing disappointing earnings. Many companies are expected to announce earnings this week including Amazon.com, Inc., Alphabet, Inc., Exxon Mobil Corporation, Merck & Co., Inc., PayPal Holdings, Inc. and Thermo Fisher Scientific Inc.
The S&P 500 Index was down 3.3% for the week. Its top-performing sectors were Real Estate (-0.2%) and Utilities (-1.1%), while the bottom-performing sectors were Basic Materials (-5.0%) and Energy (-6.6%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.1%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Apple, Inc. designs, manufactures and markets mobile communication and media devices, personal computers, portable digital music players and related products.
Apple stands to benefit from higher iPhone revenues, driven by demand for more expensive phones. Apple also has maintained strong growth in its high-margin Services segment by generating revenue from offerings such as the App Store, iTunes, Apple Music, iCloud and Apple Pay, among others. We expect Apple will use its excess cash to generate shareholder value and fund new ventures, including the further development of Apple TV. Given these positive changes, we believe Apple fits with Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Apple, Inc. | 6.9% |
| Alphabet, Inc.(Google) | 6.6% |
| Target Corporation | 6.0% |
| Danaher Corporation | 5.4% |
| Mastercard Incorporated | 4.8% |
Small Cap Core
| Medpace Holdings, Inc. | 3.8% |
| OneMain Holdings, Inc. | 3.7% |
| Fortinet, Inc. | 3.3% |
| PetIQ, Inc. | 3.1% |
| Addus Homecare Corp. | 2.8% |
Dividend Select
| Target Corporation | 7.0% |
| Microsoft Corporation | 6.1% |
| JPMorgan Chase & Co. | 5.4% |
| Eaton Corporation Plc | 3.8% |
| Truist Financial Corp. | 3.6% |
Mid Cap
| NVIDIA Corporation | 4.9% |
| Marvell Technology Group | 4.1% |
| Zebra Technologies Corp. | 3.9% |
| Cintas Corporation | 3.8% |
| Nuance Communications | 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.
