Weekly Investor – May 24, 2021
Stocks Post Mixed Results
Stocks posted mixed results in a volatile week of trading, with the S&P 500® Index ending modestly lower and the tech-heavy Nasdaq Composite Index gaining a little ground. The mixed results likely reflect a debate in the minds of investors. On the one hand, there is the strength in the U.S. economy. On the other hand, there is a growing concern about inflation. Within the S&P 500, Real Estate posted the largest gain. Energy and Industrials lost ground.
Minutes from the Federal Open Market Committee’s (FOMC) meeting in late April were released last week. Investors focused on a statement that “a number of participants” suggested that policymakers “begin discussing a plan” for tapering the Fed’s monthly asset purchase program. On the inflation front, FOMC members acknowledged the potential for inflation to run “temporarily” above their 2% target due to “transitory supply chain bottlenecks” that would fade, though some highlighted the risk that price increases could reach “unwelcome levels before they become sufficiently evident to induce a policy reaction.”
Economic strength lifted the market last Friday, as the IHS Markit Flash U.S. Composite Purchasing Managers’ Index (PMI) came in at a record 68.1 for May – a significant improvement from April’s 63.5 reading and above economists’ forecasts.
The S&P 500® Index was down 0.4% for the week. Its top-performing sectors were Real Estate (0.9%) and Health Care (0.7%), while the bottom-performing sectors were Industrials (-1.7%) and Energy (-2.8%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.6%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Founded in 1966, Mastercard Incorporated provides technology to enable electronic payments for individuals, financial institutions, merchants, governments and businesses worldwide. Mastercard’s brands include MasterCard, Maestro and Cirrus.
Mastercard is well positioned to benefit from the continuing change in payments from cash and checks to electronic transactions. The company has a solid track record of being a technology leader in its industry, consistently delivering growth to its shareholders. In addition, the company continues to make acquisitions to broaden its geographic reach and increase its product offerings.
In the current COVID-19 environment, investors will watch closely for any changes in consumer spending and travel. While that may impact Mastercard in the near term we believe the long-term growth prospects for the company and the change in payments globally make Mastercard a fit for Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 7.2% |
| Target Corporation | 6.5% |
| Apple, Inc. | 5.7% |
| Danaher Corporation | 5.0% |
| Mastercard Incorporated | 4.8% |
Small Cap Core
| Fortinet, Inc. | 4.3% |
| Medpace Holdings, Inc. | 4.2% |
| OneMain Holdings, Inc. | 4.1% |
| Select Medical Holdings | 3.1% |
| America’s Car-Mart Inc. | 2.9% |
Dividend Select
| Target Corporation | 7.4% |
| JPMorgan Chase & Co. | 5.8% |
| Microsoft Corporation | 5.5% |
| United Parcel Service, Inc. | 4.1% |
| Eaton Corporation Plc | 4.0% |
Mid Cap
| Zebra Technologies Corp. | 4.4% |
| CDW Corporation | 3.9% |
| Cintas Corporation | 3.7% |
| Marvell Technology, Inc. | 3.3% |
| Builders FirstSource, Inc. | 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.
