Argus is truly considered to be independent research firm, so it is not full of the traditional possible conflicts on interest seen in other Wall Street broker sell-side drive research. The firm has made several key changes to its model portfolios and this first group deals with stocks with payouts of dividends.
In the Equity Income portfolio, the changes are to ADD shares of Transocean Ltd. (NYSE: RIG), for 3.8% of the portfolio, and Applied Materials Inc. (NASDAQ: AMAT), for 3.2% of the portfolio. The firm says to DROP all of its shares of ConocoPhillips (NYSE: COP) and to drop all of its position in Bristol-Myers Squibb Co. (NYSE: BMY). The comments are as follows:
- “Although the Transocean shares have appreciated 9% since our November 2012 upgrade to BUY, the rally in the stock appears to be still in its early stages.”
- “The $4.9 billion Varian acquisition completed in 2012 better positions AMAT to serve fast-growing markets such as high-performance, low-power applications processors for mobile devices.”
- “Bristol-Myers is enduring a patent cliff, as it lost exclusivity on blockbuster Plavix last year and loses protection on Abilify in 2015.”
- “Following that meeting, we lowered our 2013 EPS estimate from $5.60 to $5.45, but raised our 2014 forecast from $6.40 to $6.50. Since inclusion in May 2010, the initial COP position has appreciated more than 50%. We have added to the position twice since our initial purchase. In total, the gain from the position exceeds 25%. We also note that the portfolio still holds shares of Phillips 66 (PSX) that were spun off from ConocoPhillips.”