Weekly Investor – June 28, 2021
Equity Markets Close Near All-Time Highs
The S&P 500® Index hit a new all-time high last week, the 33rd all-time high this year. Cyclicals rallied the most as positive economic data from GDP, jobs, consumer sentiment, durable goods, personal income, and personal spending all continue to confirm the strength of the US economy. Cyclical stocks also received a boost as President Joe Biden’s bipartisan $579 billion infrastructure deal added to optimism that the economic recovery is taking hold.
Energy was the top sector after West Texas Intermediate crude oil prices rallied more than 3.2% rebounding from soft pricing the week before. Banking stocks rallied on Friday after the Federal Reserve released the results of their stress test, which all banks passed. Eli Lilly & Company rallied 7.3% on Thursday after their experimental drug for Alzheimer’s gained breakthrough status from the FDA. Biogen Inc., which had its breakthrough Alzheimer’s drug approved two weeks ago, fell 10.4% last week as more competition in the space quelled enthusiasm. Splunk Inc. rallied 9.4% last week after global technology investment firm Silver Lake announced a $1 billion convertible note investment which the company will use for growth and share buybacks. NIKE, Inc. rallied 15.5% on Friday after announcing quarterly revenue and earnings that surpassed analyst expectations. The apparel maker credited their direct-to-consumer sales strategy as a key driver in profit growth, which led them to increase their full-year guidance.
The S&P 500 Index was up 2.7% for the week. Its top-performing sectors were Energy (6.7%) and Financials (5.3%), while the bottom-performing sectors were Real Estate (1.3%) and Utilities (0.7%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.5%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Skyworks Solutions, Inc. provides semiconductors worldwide. Founded in 1962 and headquartered in Woburn, Massachusetts, its products support smartphones as well as tablet, automotive, broadband, cellular infrastructure and energy management applications.
Skyworks is well positioned to benefit from the expected transition to 5G (fifth-generation) smartphones. Because of the increased complexity of 5G smartphones, Skyworks has the potential to generate more profit from the upcoming transition to 5G technology. Additionally, the management team has a solid track record of executing on technology advancement. Skyworks also returns the majority of its excess capital back to shareholders in the form of dividends and share buybacks. With the ability to generate additional profit from changes in smartphone technology along with a solid management team, Skyworks fits our Change-BasedSM investment process.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 7.6% |
| Target Corporation | 6.8% |
| Apple, Inc. | 5.9% |
| Danaher Corporation | 5.2% |
| Mastercard Incorporated | 4.8% |
Small Cap Core
| Fortinet, Inc. | 4.8% |
| OneMain Holdings, Inc. | 4.5% |
| Medpace Holdings, Inc. | 4.4% |
| Telos Corporation | 3.4% |
| Select Medical Holdings | 3.1% |
Dividend Select
| Target Corporation | 7.8% |
| Microsoft Corporation | 5.9% |
| JPMorgan Chase & Co. | 5.4% |
| Life Storage, Inc. | 4.0% |
| Eaton Corporation Plc | 4.0% |
Mid Cap
| Zebra Technologies Corp. | 4.4% |
| Marvell Technology, Inc. | 3.9% |
| Cintas Corporation | 3.8% |
| CDW Corporation | 3.8% |
| 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.
