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Weekly Investor

Weekly Investor – March 8, 2021

08 March 2021

S&P Finishes Up for the Week

The S&P 500® Index gained 0.8% last week. The rotation from higher valuation, more expensive stocks to lower valuation stocks continued. Stocks were lower at the beginning of the week as the interest rate or yield on the 10-year Treasury bond increased. Higher yields drove the rotation in stocks, as the S&P 500 Growth® Index fell by 1.2% for the week, while the S&P 500 Value® Index gained 3.0%. By sector, Energy and Financials, which tend to have lower valuations, were the top performers, while Information Technology – generally a more expensive sector – was the worst. On Friday, Energy names rallied as OPEC surprised oil markets by deciding not to increase output. That decision drove oil prices to $66.09 a barrel, the highest closing since November 2018.

While earnings season is winding down, there were a few notable results. Target Corp. announced quarterly results that were disappointing, driving the stock down 5.9% for the week. Although the big box retailer beat quarterly earnings estimates, forward guidance was weaker than market expectations and was the primary driver for the stock’s decline. Looking to this week, investors will continue to track the progress of the $1.9T stimulus package.

The S&P 500 Index was up 0.8% for the week. Its top-performing sectors were Energy (10.1%) and Financials (4.3%), while the bottom-performing sectors were Technology (-1.4%) and Consumer Discretionary (-2.8%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.6%.

We continue to seek companies that reflect our Change-BasedSM investment approach.

Change Based Investment

Centene Corporation is a major health insurance company, based in St. Louis, Missouri. Centene’s main lines of business are government health care plans including Medicare, Medicaid, The Health Insurance Marketplace System and Tricare.

Centene has a strong growth outlook as a leading managed care company. The company continues to make shareholder-friendly acquisitions, including the acquisition of Magellan Health. Additionally, worries over the uncertainty of health care reform have resulted in a compelling valuation for Centene. The attractive valuation of Centene against the backdrop of strong industry fundamentals makes Centene a good fit for Argent’s Change-BasedSM investment approach.

Top 5 Equity Holdings

Large Cap Growth

Alphabet, Inc.(Google) 7.2%
Apple, Inc. 6.1%
Target Corporation 5.5%
Mastercard Incorporated 5.2%
Danaher Corporation 4.7%

Small Cap Core

OneMain Holdings, Inc. 4.2%
Medpace Holdings, Inc. 4.2%
Fortinet, Inc. 3.6%
America’s Car-Mart, Inc. 3.1%
Select Medical Holdings 2.8%

Dividend Select

Target Corporation 6.3%
JPMorgan Chase & Co. 5.9%
Microsoft Corporation 5.7%
Eaton Corporation Plc 4.2%
Truist Financial Corp. 4.1%

Mid Cap 

Zebra Technologies Corp. 4.5%
CDW Corporation 3.8%
Cintas Corporation 3.8%
Builders FirstSource, Inc. 3.3%
Marvell Technology Group 3.2%

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.