Weekly Investor – February 16, 2021
Small Cap Stocks Outperform
The S&P 500® Index rose just over 1% last week. Smaller cap stocks in the Russell 2000® Index outperformed their larger cap peers, rising 2.3% for the week. Other assets rose as well. Oil broke through its 2020 high, closing at almost $60 per barrel. Bitcoin continued its march upwards, rising above $47,000 as corporate players such as Tesla, Inc. and Mastercard Incorporated announced they would accept the cryptocurrency. On Saturday, the Senate acquitted former President Trump on a 57-43 vote. The quick end to the impeachment trial allows Democrats to move forward with their legislative agenda.
Most companies in the S&P 500 have reported quarterly earnings. 82% of those reporting beat earnings estimates, compared to 72% last year. Revenues, or sales, beat estimates 66% of the time compared to only 38% a year ago. Looking ahead to this holiday-shortened week, the Federal Reserve’s Federal Open Market Committee (FOMC) meeting minutes are set to be released on Wednesday, followed by housing starts and initial jobless claims later in the week.
The S&P 500 Index was up 1.2% for the week. Its top-performing sectors were Energy (4.3%) and Technology (2.3%), while the bottom-performing sectors were Consumer Discretionary (-1.3%) and Utilities (-1.8%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.2%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Berkshire Hathaway is an American multinational holding company headquartered in Omaha, Nebraska. The company owns many well-known businesses such as GEICO, Duracell, Fruit of the Loom and Dairy Queen. Additionally, Berkshire Hathaway owns significant minority holdings in many large publicly traded companies. The company is known for its leadership by Warren Buffett, who serves as its chairman and chief executive.
Berkshire Hathaway is a cash-rich company with substantial assets on its balance sheet, which the company can use to acquire new businesses or to continue buying back its own stock. The company has bought back a substantial amount of its shares during 2020, an indication that the company’s management believes its stock is relatively inexpensive. For these reasons, we believe Berkshire Hathaway is a good fit for Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 7.0% |
| Apple, Inc. | 6.6% |
| Target Corporation | 5.9% |
| Danaher Corporation | 5.2% |
| Mastercard Incorporated | 4.8% |
Small Cap Core
| Medpace Holdings, Inc. | 4.4% |
| OneMain Holdings, Inc. | 4.1% |
| Fortinet, Inc. | 3.4% |
| Addus Homecare Corp. | 2.8% |
| America’s Car-Mart, Inc. | 2.8% |
Dividend Select
| Target Corporation | 7.0% |
| Microsoft Corporation | 6.1% |
| JPMorgan Chase & Co. | 5.6% |
| Truist Financial Corp. | 3.9% |
| Eaton Corporation Plc | 3.8% |
Mid Cap
| NVIDIA Corporation | 5.2% |
| Zebra Technologies Corp. | 4.3% |
| Marvell Technology Group | 4.0% |
| Cintas Corporation | 3.7% |
| CDW Corporation | 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.
