Weekly Investor – February 8, 2021
S&P Up for the Week
Equity markets rose last week as COVID-19 concerns lessened and robust quarterly earnings reports continued. The S&P 500® Index gained 4.6% last week, its best weekly return since last November. Economically sensitive cyclical sectors, including Energy, Communication Services, Financials and Consumer Discretionary, outperformed non-cyclicals in what investors call a ‘Risk On’ market. To be precise, those cyclical sectors rose over 6% for the week, while the non-cyclical sectors of Health Care, Utilities and Consumer Staples were up less than 3%. Investor optimism on vaccines and the reopening of the economy was apparent last week as the S&P 1500 Casinos & Gaming® Index returned 18.8%. Penn National Gaming, Inc., MGM Resorts International, Wynn Resorts, Limited, Caesars Entertainment, Inc. and Las Vegas Sands Corp., the five largest names in the index, all were up more than 15%.
Earnings season was in full gear, as 108 companies in the S&P 500 announced quarterly results. Among the most notable was Alphabet, Inc., Google’s parent company, posting better-than-expected results, driving the stock up 14.3% for the week. PayPal Holdings, Inc. was another winner on better-than-expected earnings, rising nearly 15% for the week. Looking to this week, earning season continues as 82 companies in the S&P 500 Index are expected to report quarterly results, including The Walt Disney Company, The Coca-Cola Company, DuPont de Nemours, Inc., General Motors Company, and Twitter, Inc.
The S&P 500 Index was up 4.6% for the week. Its top-performing sectors were Energy (8.3%) and Communication Services (7.3%), while the bottom-performing sectors were Utilities (2.5%) and Health Care (0.3%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.2%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Applied Materials, Inc. is a U.S. corporation that supplies equipment, services and software for the manufacture of semiconductor chips for electronics, smartphones, televisions, flat panel displays and solar products.
Applied Materials is a well-run company and considered a “best-in-breed” semiconductor equipment supplier. Additionally, there is a trend in the industry toward more complexity in semiconductors. This trend should drive a higher level of spending for semiconductor manufacturing equipment and as a consequence, higher earnings for Applied Materials. COVID-19 is impacting the operations of Applied Materials near term. Longer term, the positive changes going on at the company make Applied Materials a good fit for Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 7.2% |
| Apple, Inc. | 6.8% |
| Target Corporation | 6.0% |
| Danaher Corporation | 5.1% |
| Mastercard Incorporated | 4.8% |
Small Cap Core
| OneMain Holdings, Inc. | 4.4% |
| Medpace Holdings, Inc. | 3.9% |
| Fortinet, Inc. | 3.3% |
| Addus Homecare Corp. | 2.9% |
| Envestnet, Inc. | 2.9% |
Dividend Select
| Target Corporation | 7.0% |
| Microsoft Corporation | 6.1% |
| JPMorgan Chase & Co. | 5.5% |
| Truist Financial Corp. | 3.8% |
| Eaton Corporation Plc | 3.8% |
Mid Cap
| NVIDIA Corporation | 4.9% |
| Cintas Corporation | 3.9% |
| Zebra Technologies Corp. | 3.8% |
| Marvell Technology Group | 3.8% |
| Nuance Communications | 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.
