Singular Research Director’s Letter: September performance 2019
Singular Research’s September 2019 Director’s Letter
The equity markets rebounded from signs of a potential trade war deal. However, the mood remains cautious on Wall Street as there are still unnerving recessionary signs. The September Purchasing Managers Index (PMI) registered 47.8 percent, a decrease of 1.3 percentage points from the August reading of 49.1 percent. The Conference Board Leading Economic Index® (LEI) for the U.S. declined 0.1 percent in September to 111.9 (2016 = 100), following a 0.2 percent decline in August, and a 0.4 percent increase in July. On a positive note, the unemployment rate fell 0.2 percentage points to 3.5%, the lowest rate since December 1969.
For the month of September, the Singular coverage list outperformed the S&P 500 and Russell 2000 by 74 and 50 basis points, respectively. As recessionary fears continue, the general market trend appears to be shifting to value and away from growth-oriented stocks.
ZEUS, GEOS, and NVEE all performed well as recessionary indicators have driven investors to safe-haven stocks, protected from any trade war backlash. HBIO announced a strategic action plan with target goals that investors have positively recognized.
ROKU, RUBI, and LUNA all had great results for the second quarter. As a result, their stock prices showed great price appreciation in August. A negative research report on ROKU combined with fears of a slowing economy created a massive ROKU sell-off, sending the stock to a recent low of $99.74 (9/27). However, we believe this great price decline was unwarranted and re-iterated our BUY recommendation shortly thereafter. ROKU is now back to $131.22 (10/24). There has been a similar trend with RUBI and LUNA that we believe will reverse after their next earnings release.
For September, we launched coverage on IRadimed Corporation, a maker of MRI compatible medical devices with growing demand for their innovative product. We wish to thank our clients for their support and belief in our process. For a complimentary report for new subscribers, to provide feedback, or to share some valued insights, please e-mail me using the link below.
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Robert Maltbie, CFA
Singular Research, President