Weekly Investor – June 1, 2021
Equity Markets Climb Higher
Equity markets climbed higher last week as positive economic data from consumption to employment continued to fuel economic growth and recovery. Large cap stocks gained 1.2% while small and mid cap stocks rose 1.4% and 2.2% respectively. Better results for mid and small cap stocks have been a constant in 2021. On a year-to-date basis, the large cap S&P 500® Index has returned 12.6% while the S&P MidCap 400® is up 18.8% and the S&P SmallCap 600® is up 23.1%.
According to Bloomberg, of the S&P 500 companies with reported results, earnings beat expectations by 23.1% and sales were better than expected by 3.9%. Notable stocks from last week include Salesforce.com, Inc. where the company announced quarterly earnings and revenue well ahead of street expectations, driving the stock up almost 7.0% for the week. Ulta Beauty, Inc. also announced quarterly results with comparable sales up 65.9%, well ahead of analysts’ expectations, pushing the stock up 9.3%. Finally, the three major U.S. cruise lines in the S&P 500, Royal Caribbean Group, Norwegian Cruise Line Holdings Ltd. and Carnival Corporation & plc gained an average of 10.0% last week after it was announced that Florida and Texas gave approval for the industry to set sail again in June.
The S&P 500® Index was up 1.2% for the week. Its top-performing sectors were Communication Services (2.5%) and Consumer Discretionary (2.2%), while the bottom-performing sectors were Health Care (-0.7%) and Utilities (-1.6%). 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 1975 and headquartered in Redmond, Washington, Microsoft Corporation develops, licenses and supports a range of software products, services and gaming platforms for computing devices worldwide.
Microsoft is well positioned to continue growing as its customers shift their computing from on-site servers to Microsoft’s public cloud. We believe this change adds to Microsoft’s attractive profile making the stock a solid fit for Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 7.3% |
| Target Corporation | 6.5% |
| Apple, Inc. | 5.6% |
| Danaher Corporation | 5.0% |
| D.R. Horton, Inc. | 4.9% |
Small Cap Core
| Fortinet, Inc. | 4.4% |
| OneMain Holdings, Inc. | 4.3% |
| Medpace Holdings, Inc. | 4.2% |
| America’s Car-Mart Inc. | 3.2% |
| Select Medical Holdings | 3.2% |
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. | 4.3% |
| CDW Corporation | 3.8% |
| Cintas Corporation | 3.6% |
| Marvell Technology, Inc. | 3.4% |
| Builders FirstSource, Inc. | 3.1% |
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.
