Weekly Investor – November 1, 2021
S&P Reaches New High
The S&P 500® Index rose 1.3% last week, reaching a new high. For October, the index rebounded from September to finish up over 6%, the strongest monthly return since November of 2020. Earnings season is in full swing with 279 of the companies in the S&P 500 having reported. The strongest results came from Financials and Energy while Industrials lagged. Supply chain issues are a common theme this quarter. The largest companies in the S&P 500 reported last week as Tesla, Inc., Microsoft Corporation, Alphabet, Inc., Amazon.com, Inc., and Apple, Inc. collectively led the market higher. Mark Zuckerberg, Facebook’s CEO, doubled down on promoting the metaverse, announcing that his company will change its name to Meta Platforms, Inc., effective in December.
Early reported estimates of third quarter Gross Domestic Product growth of 2% year-over-year indicated a significant slowdown in economic activity from the second quarter of this year, but still near the long-term goal of the Federal Reserve. Chairman Powell of the Fed will speak Wednesday. He is expected to announce that the Fed will begin tapering its open market bond purchases.
The S&P 500 Index was up 1.3% for the week. Its top-performing sectors were Consumer Discretionary (4.0%) and Communication Services (2.0%), while the bottom-performing sectors were Energy (-0.8%) and Financials (-0.9%). In the fixed-income market, the 10-year Treasury yield was lower, ending at 1.6%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Centene Corporation is a major health insurance company, based in St. Louis, Missouri. Centene’s main lines of business are government health care plans including Medicare, Medicaid, The Health Insurance Marketplace System and Tricare.
Centene has a strong growth outlook as a leading managed care company. The company continues to make shareholder-friendly acquisitions, including Magellan Health and Wellcare. Additionally, worries over the uncertainty of health care reform have resulted in a compelling valuation for Centene. The attractive valuation of Centene against the backdrop of strong industry fundamentals makes Centene a good fit for Argent’s Change BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
|D.R. Horton, Inc.||4.4%|
Small Cap Core
|Medpace Holdings, Inc.||4.7%|
|OneMain Holdings, Inc.||4.0%|
|Houlihan Lokey, Inc.||3.3%|
|JPMorgan Chase & Co.||5.6%|
|Eaton Corporation Plc||4.3%|
|United Parcel Service, Inc.||3.9%|
|Marvell Technology, Inc.||4.3%|
|Zebra Technologies Corp.||4.1%|
|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.