Weekly Investor – April 12, 2021
Earnings Season Kicks Off
The S&P 500® Index rose over 2.7% last week, closing over 4,000 for the first time. The index is on its longest weekly winning streak since October of last year. Semiconductor shortages continue to make news, shuttering auto assembly plants as well as other industries. Defense spending looks to be an area of the budget the Biden administration is ready to streamline. According to people familiar with the plans, the President intends to submit a $715 billion budget to the Pentagon, which adjusted for inflation, comes in lower than his predecessor.
The reopening trade continues to gain steam. The latest move comes from Norwegian Cruise Lines Holdings Ltd. after the company announced plans for future passengers and crew to show proof of vaccination at least two weeks before boarding its cruise liners. The industry has been one of the hardest hit during the pandemic. Looking ahead to this week, Financials kick off first quarter earnings, with JPMorgan Chase & Co., Morgan Stanley and BlackRock, Inc. among others expected to report results.
The S&P 500 Index was up 2.7% for the week. Its top-performing sectors were Technology (4.7%) and Consumer Discretionary (4.2%), while the bottom-performing sectors were Real Estate (0.5%) and Energy (-4.0%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.7%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Facebook, Inc. provides various social networking products to connect and share through mobile devices, personal computers and other devices worldwide. Its solutions include the company’s namesake Facebook website and app, Instagram, WhatsApp Messenger and Oculus VR. Facebook was founded in 2004 and is headquartered in Menlo Park, California.
With 2.9 billion active users across various services, Facebook has established itself as the undisputed leader in social media. From dorm room startup to becoming one of the largest companies in the world, Facebook’s rapid rise to dominance across the globe has brought much praise over the years. Though, of late, criticism and scrutiny have been applied to Facebook and social media as a whole. In addition, regulatory concerns over Facebook’s dominance of social media have pressured the stock’s valuation. Overall, negative news has done little to change Facebook user behavior. Advertisers continue to place more and more ads on the various platforms Facebook owns indicating that the reach and frequency Facebook provides is increasingly valuable relative to other options to reach consumers. While it is impossible to know the impact of future regulation on Facebook’s business model, we believe the company’s growth prospects remain bright.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 7.2% |
| Apple, Inc. | 6.1% |
| Target Corporation | 6.0% |
| Mastercard Incorporated | 5.0% |
| D.R. Horton, Inc. | 5.0% |
Small Cap Core
| Medpace Holdings, Inc. | 4.3% |
| OneMain Holdings, Inc. | 4.1% |
| Fortinet, Inc. | 4.0% |
| UFP Industries, Inc. | 3.2% |
| ASGN Incorporated | 3.0% |
Dividend Select
| Target Corporation | 7.0% |
| Microsoft Corporation | 5.9% |
| JPMorgan Chase & Co. | 5.8% |
| Eaton Corporation Plc | 4.0% |
| Truist Financial Corp. | 4.0% |
Mid Cap
| Zebra Technologies Corp. | 4.4% |
| CDW Corporation | 4.0% |
| Cintas Corporation | 3.7% |
| Marvell Technology Group | 3.5% |
| Builders FirstSource, Inc. | 3.4% |
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.
