Weekly Investor – April 19, 2021
S&P Hits All-Time Highs
The S&P 500® Index finished last week at all-time highs as retail sales rose. In addition, unemployment claims fell to the lowest level since the pandemic began. The U.S. is not the only area posting improvement. Growth is inflecting higher in China with its Gross Domestic Product (GDP) rising 18.3% in the first quarter.
Banks kicked off first quarter earnings season last week. Credit quality remains stellar, driving strong results from loan loss releases. Capital market results were also better than expected, with strong investment banking and trading revenue. Loan growth, however, remains lackluster. Morgan Stanley became the latest victim in the Archegos Capital Management saga, resulting in a $911 million trading loss. In other corporate news, shares of J.B. Hunt Transport Services, Inc. and PPG Industries, Inc. rose after quarterly results beat both on revenues and earnings. Taiwan Semiconductor Manufacturing Company Limited warned the chip shortage could last into 2022, leading the world’s largest chip manufacturer again to increase its capital expenditure and growth guidance. Many auto manufactures have paused production due to the chip shortage in recent weeks.
This week a bevy of firms will report results, likely showing the continued recovery of the U.S. economy. In addition, investors will also closely monitor commentary from the CDC over the paused Johnson & Johnson vaccine.
The S&P 500 Index was up 1.4% for the week. Its top-performing sectors were Utilities (3.7%) and Basic Materials (3.2%), while the bottom-performing sectors were Energy (0.2%) and Communication Services (0.0%). In the fixed-income market, the 10-year Treasury yield was down, ending at 1.6%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Fiserv is a financial technology firm headquartered in Brookfield, Wisconsin. The company serves the financial services industry, driving innovation in payments, processing services, risk and compliance, and customer and channel management.
Fiserv has a solid track record of executing on mergers and acquisitions while it has consistently delivered mid-single-digit organic sales growth. Argent believes Fiserv’s acquisition of First Data, a payment processing company, will allow the company to realize cost savings and expand its portfolio of services to existing customers. Because of the company’s history of execution and the upside potential brought about from the First Data acquisition, Fiserv fits with Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
|D.R. Horton, Inc.||5.1%|
Small Cap Core
|Medpace Holdings, Inc.||4.4%|
|OneMain Holdings, Inc.||4.1%|
|UFP Industries, Inc.||3.2%|
|JPMorgan Chase & Co.||5.6%|
|Eaton Corporation Plc||4.0%|
|Truist Financial Corp.||3.8%|
|Zebra Technologies Corp.||4.4%|
|Builders FirstSource, Inc.||3.5%|
|Marvell Technology Group||3.3%|
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.