Weekly Investor – October 25, 2021
S&P Up for the Week
The S&P 500® Index gained 1.6% last week and is up over 22% so far this year. The increase comes despite multiple economic and geopolitical headwinds, including concerns over inflation, global supply-chain disruptions and scrutiny over any potential changes in policy on the part of the Federal Reserve.
Real Estate companies (REITs) were the best performing sector last week, gaining over 3%, driven by data center and communication REITs. On the other side of the performance spectrum, technology stocks Snap Inc., Intel Corporation and International Business Machines Corporation (IBM) released disappointing quarterly results. Snap warned that a decrease in advertising spending will lower the company’s earnings in 2022. Higher costs for Intel and IBM, combined with lower growth prospects, dragged down the stocks. Since earnings season began two weeks ago, the S&P 500 is up over 4%. This week investors will be watching new home sales and inventory data. In addition, earnings will take center stage as 165 companies in the S&P 500 are expected to report results, including most of the technology giants.
The S&P 500 Index was up 1.6% for the week. Its top-performing sectors were Real Estate (3.2%) and Health Care (2.9%), while the bottom-performing sectors were Consumer Staples (0.8%) and Communication Services (-0.6%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.7%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Berkshire Hathaway is an American multinational holding company headquartered in Omaha, Nebraska. The company owns many well-known businesses such as GEICO, Duracell, Fruit of the Loom and Dairy Queen. Additionally, Berkshire Hathaway owns significant minority holdings in many large publicly traded companies. The company is known for its leadership by Warren Buffett, who serves as its chairman and chief executive.
Berkshire Hathaway is a cash-rich company with substantial assets on its balance sheet, which the company can use to acquire new businesses or to continue buying back its own stock. The company bought back a substantial amount of shares during 2020, an indication that the company’s management believes its stock is relatively inexpensive. For these reasons, we believe Berkshire Hathaway is a good fit for Argent’s Change BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 8.1% |
| Apple, Inc. | 6.4% |
| Danaher Corporation | 5.8% |
| Target Corporation | 5.8% |
| LPL Financial Holdings | 4.5% |
Small Cap Core
| Fortinet, Inc. | 4.8% |
| Medpace Holdings, Inc. | 4.5% |
| OneMain Holdings, Inc. | 4.1% |
| FirstService Corporation | 3.2% |
| ASGN Incorporated | 3.2% |
Dividend Select
| Target Corporation | 6.9% |
| Microsoft Corporation | 6.5% |
| JPMorgan Chase & Co. | 5.7% |
| Eaton Corporation Plc | 4.2% |
| Truist Financial Corp. | 3.9% |
Mid Cap
| Marvell Technology, Inc. | 4.2% |
| Zebra Technologies Corp. | 4.1% |
| Cintas Corporation | 4.0% |
| CDW Corporation | 3.9% |
| Builders FirstSource, Inc. | 3.7% |
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.
