Weekly Investor – February 22, 2021
S&P Down during Shortened Week
Last week, the S&P 500® Index traded lower each day of the holiday-shortened week as treasury yields rose. While the broader market moved lower, more cyclical, economically sensitive areas of the market posted gains, including energy, financials and small cap stocks. Economic data remained strong with the Purchasing Managers’ Index (PMI) showing expansion and retail sales exceeding even the most optimistic forecasts.
In stocks, Applied Materials, Inc. continued the trend of strong results for semiconductor equipment makers, forecasting better-than-expected silicon wafer sales for 2021. Shares of Roku, Inc. gained after a strong beat and raise quarter as consumers continue to shift to streaming platforms. Wells Fargo & Company rose over 10% for the week on higher interest rates and hopes that the Federal Reserve would ease its regulations on the bank.
Key on the minds of investors for this week will be Federal Reserve Chairman Jerome Powell’s report in front of Congress on Tuesday and a likely first vote on Joe Biden’s $1.9 trillion stimulus package.
The S&P 500 Index was down 0.7% for the week. Its top-performing sectors were Energy (3.1%) and Financials (2.8%), while the bottom-performing sectors were Utilities (-2.0%) and Health Care (-2.4%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.3%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Biogen Inc. discovers, develops, manufactures and delivers therapies to treat neurological and autoimmune diseases worldwide. Biogen Inc. was founded in 1978 and is headquartered in Cambridge, Massachusetts.
Biogen’s CEO, named in 2016, announced a more focused strategy aimed at accelerating the company’s growth prospects through internal research as well as business development efforts. This comes on the heels of a new product launch that is driving better-than-expected results for the company. We continue to believe investors are under-appreciating the depth of Biogen’s pipeline, which includes therapies targeting Parkinson’s disease, stroke and Alzheimer’s disease, to name a few. Although Biogen’s unfavorable patent decision on its multiple sclerosis drug Tecfidera was a setback for the company, with clinical data for ten mid-to-late stage drug trials over the near term, Biogen’s attractive valuation offers a compelling opportunity. These changes within Biogen make it a good fit for Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 7.1% |
| Apple, Inc. | 6.4% |
| Target Corporation | 5.9% |
| Danaher Corporation | 5.0% |
| Mastercard Incorporated | 4.7% |
Small Cap Core
| Medpace Holdings, Inc. | 4.2% |
| OneMain Holdings, Inc. | 3.8% |
| Fortinet, Inc. | 3.6% |
| America’s Car-Mart, Inc. | 2.8% |
| ASGN Incorporated | 2.8% |
Dividend Select
| Target Corporation | 6.9% |
| Microsoft Corporation | 6.0% |
| JPMorgan Chase & Co. | 5.8% |
| Truist Financial Corp. | 4.1% |
| Eaton Corporation Plc | 3.9% |
Mid Cap
| NVIDIA Corporation | 5.2% |
| Zebra Technologies Corp. | 4.5% |
| CDW Corporation | 3.8% |
| Marvell Technology Group | 3.8% |
| Cintas 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.
