Argus offers investors what is generally considered to be truly independent research. The firm has none of the possible conflicts of interest that you might see from traditional Wall St. sell-side firms because the company’s main effort is generating research ideas rather than generating commissions. When it makes changes to its model portfolios, we generally pay attention.
Argus made two changes to its Institutional Model Portfolio for the month of April, and both of the equity portfolio changes come from the basic materials sector. The firm is suggesting that investors buy a theoretical 400 shares of Newmont Mining Corp. (NYSE: NEM), for a model portfolio weighting of about 2.1%. It also said to sell out of Monsanto Co. (NYSE: MON), for all of its weighting that the company still had.
Monsanto shares have gained 15% since being added to the Argus model portfolio in October of 2012, versus 5% price appreciation for the S&P 500. As far as the purchase of Newmont, Argus said that its shares have been very weak with miners in recent weeks. While it is viewed as a play on rising gold prices and a falling dollar, earnings were better than expected and its dividend being more than 4% now is of interest.
Monsanto is up after its earnings report at about $105, versus a 52-week trading range of $69.70 to $106.61. Newmont is down almost 1% at $39.50, against a 52-week range of $38.50 to $57.93.