Weekly Investor – April 26, 2021
S&P Falls Slightly for the Week
The S&P 500® Index fell slightly last week after rising over 7% during the previous four weeks. The biggest decline came mid-day Thursday on news of a potential plan by the Biden administration to raise the capital gains tax rate to 39.6% on the wealthy. All sectors of the market fell, as the S&P 500 Index dropped 0.9%, the largest one-day loss in over a month. Friday saw equities rebound with a 1.1% gain as investors embraced positive economic data. U.S. initial jobless claims declined to 547K, beating consensus estimates. This is the lowest weekly level reported since mid-March 2020.
The best performing stock in the S&P 500 Index last week was Equifax Inc., a top credit bureau, rising 20.3% on positive earnings, posting its highest ever quarterly revenue. Kansas City Southern, a rail freight transportation company, saw its stock price jump over 15% last Tuesday as Canadian National Railway Company offered a competing bid to acquire the company. Kansas City Southern announced in March that it had agreed to be acquired by Canadian Pacific Railway Limited. Intel Corporation opened down on Friday following its earnings release. Although the company beat expectations, Intel’s important data-center sales fell 20%. That pushed the stock down 8.5% for the week. Earnings announcements are in full swing and companies expected this week include Apple, Inc., Microsoft Corporation, Amazon.com, Inc., Alphabet, Inc., Facebook, Inc., Tesla, Inc., Visa Inc., Mastercard Incorporated, Comcast Corporation, and many more.
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
GoDaddy Inc. designs and develops cloud-based technology products. The company provides domain name registration, website hosting as well as a broad range of marketing tools and services.
COVID-19 is accelerating the use of e-commerce as a means for consumers to interact with small to medium-sized businesses, GoDaddy’s target market. In September 2019, the company appointed Aman Bhutani as CEO, the former Expedia president with a track record of delivering solid growth. Bhutani is bringing a strong focus to growing e-commerce related products and services to GoDaddy. Additionally, GoDaddy is trading at an attractive valuation relative to other online service providers. Because of these changes and the company’s growth potential, GoDaddy fits 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.||4.6%|
|OneMain Holdings, Inc.||3.9%|
|UFP Industries, Inc.||3.2%|
|JPMorgan Chase & Co.||5.5%|
|Eaton Corporation Plc||4.1%|
|Truist Financial Corp.||3.8%|
|Zebra Technologies Corp.||4.3%|
|Builders FirstSource, Inc.||3.4%|
|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.