Weekly Investor – September 20, 2021
Stocks End the Week Lower
Stocks ended the week lower with mixed economic data points and profit warnings from a handful of industrial stocks. The U.S. consumer remains healthy with retail sales rising by 0.7% last month and inflation moderating slightly in August. Industrial production missed expectations due to Hurricane Ida and supply chain inefficiencies.
Energy stocks were the big winners for the week as supply has not recovered from Hurricane Ida, leading to crude finishing the week above $70 per barrel. Mega-cap tech stocks were also a drag on the market as shares of Apple, Inc. moved lower for the week after introducing new iPhones. Facebook, Inc. fell 3.7% for the week on bad press that the platform allowed criminal activity and poses risks to young people’s mental health. Looking ahead to this week, investors will be focused on the Federal Reserve meeting and the timing of potential tapering.
The S&P 500® Index was down 0.6% for the week. Its top-performing sectors were Energy (3.3%) and Consumer Discretionary (0.5%), while the bottom-performing sectors were Utilities (-3.1%) and Basic Materials (-3.2%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.4%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Alphabet, Inc. has achieved worldwide name recognition with its famed Google search engine. Beyond this well-known service, the technology company also provides targeted advertising solutions (Google AdSense), collaboration tools for organizations (Google Apps), and a host of additional online utilities such as Google Maps, YouTube, Google Docs, Google Toolbar, Google Desktop and Gmail. This Mountain View, California-based company was founded in 1998 and prides itself on maintaining a corporate culture that encourages creativity and community.
Recently, there has been more regulatory concern over concentration within the technology industry. Argent will carefully track any changes that may affect Alphabet. In the meantime, we believe the current trend of allocating additional dollars to internet search ads will continue, and that Alphabet is well positioned to benefit from this trend. With its sophisticated search engine, Alphabet is able to match buyers to providers. Providers recognize the attractiveness of this service and are willing to pay for it. In addition, Alphabet’s incubated services, such as self-driving cars, could provide additional value to shareholders for the long term. The combination of Alphabet’s current operations coupled with potential future products, creates a compelling addition to Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 8.4% |
| Apple, Inc. | 6.3% |
| Danaher Corporation | 6.1% |
| Target Corporation | 5.7% |
| D.R. Horton, Inc. | 4.5% |
Small Cap Core
| Medpace Holdings, Inc. | 4.6% |
| OneMain Holdings, Inc. | 4.4% |
| Fortinet, Inc. | 4.4% |
| Select Medical Holdings | 3.2% |
| ASGN Incorporated | 3.1% |
Dividend Select
| Target Corporation | 6.9% |
| Microsoft Corporation | 6.6% |
| JPMorgan Chase & Co. | 5.5% |
| Life Storage, Inc. | 4.5% |
| Eaton Corporation Plc | 4.3% |
Mid Cap
| Zebra Technologies Corp. | 4.6% |
| Marvell Technology, Inc. | 4.1% |
| CDW Corporation | 4.0% |
| Cintas Corporation | 3.8% |
| Builders FirstSource, Inc. | 3.5% |
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.
