Argan, Inc. (NYSE:AGX) Sees Significant Increase in Short Interest

Key Points

• Short interest jumped: Short interest in Argan rose to 795,305 shares as of March 31, a 38.6% increase from March 15, representing about 6.1% of shares shorted and a short-interest ratio of 1.0 days based on average volume.
• Analysts lifting outlook: Multiple firms raised ratings and targets — notably Goldman Sachs boosted its price target to $518 with a "buy" — leaving a consensus of "Moderate Buy" and an average target of $425.40.
• Strong results and capital returns: Argan beat Q earnings estimates ($3.47 EPS vs. $1.99 expected) with revenue up 12.7%, and the board authorized a $200 million buyback (about 2.5% of shares) while declaring a $0.50 quarterly dividend.

Argan, Inc. (NYSE:AGX - Get Free Report) was the recipient of a significant growth in short interest in the month of March. As of March 31st, there was short interest totaling 795,305 shares, a growth of 38.6% from the March 15th total of 573,972 shares. Based on an average trading volume of 812,920 shares, the short-interest ratio is currently 1.0 days. Approximately 6.1% of the shares of the company are short sold.

Analysts Set New Price Targets

A number of research firms have recently commented on AGX. Wall Street Zen raised Argan from a "hold" rating to a "buy" rating in a report on Saturday, March 28th. Freedom Capital raised Argan to a "hold" rating in a report on Tuesday, March 10th. Weiss Ratings reaffirmed a "buy (b)" rating on shares of Argan in a report on Monday, April 6th. The Goldman Sachs Group raised their price target on Argan from $399.00 to $518.00 and gave the stock a "buy" rating in a report on Friday, March 27th. Finally, Lake Street Capital increased their price objective on Argan from $325.00 to $375.00 and gave the stock a "hold" rating in a research report on Friday, March 27th. One investment analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating and four have assigned a Hold rating to the company's stock. According to data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $425.40.

Insider Buying and Selling

In other news, Director Peter W. Getsinger sold 2,581 shares of the firm's stock in a transaction on Thursday, April 2nd. The stock was sold at an average price of $552.73, for a total value of $1,426,596.13. Following the completion of the transaction, the director directly owned 10,847 shares of the company's stock, valued at $5,995,462.31. This trade represents a 19.22% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Cynthia Flanders sold 19,000 shares of the firm's stock in a transaction on Wednesday, January 21st. The stock was sold at an average price of $386.70, for a total value of $7,347,300.00. Following the completion of the transaction, the director directly owned 26,207 shares of the company's stock, valued at $10,134,246.90. The trade was a 42.03% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 53,325 shares of company stock valued at $23,305,955 over the last three months. Insiders own 6.69% of the company's stock.

Institutional Investors Weigh In On Argan

A number of large investors have recently added to or reduced their stakes in the company. PNC Financial Services Group Inc. raised its position in Argan by 5.9% during the fourth quarter. PNC Financial Services Group Inc. now owns 541 shares of the construction company's stock valued at $170,000 after purchasing an additional 30 shares in the last quarter. National Bank of Canada FI raised its position in Argan by 26.7% during the third quarter. National Bank of Canada FI now owns 147 shares of the construction company's stock valued at $40,000 after purchasing an additional 31 shares in the last quarter. Pallas Capital Advisors LLC raised its position in Argan by 1.3% during the fourth quarter. Pallas Capital Advisors LLC now owns 2,564 shares of the construction company's stock valued at $803,000 after purchasing an additional 34 shares in the last quarter. Ring Mountain Capital LLC raised its position in Argan by 1.3% during the third quarter. Ring Mountain Capital LLC now owns 2,735 shares of the construction company's stock valued at $739,000 after purchasing an additional 35 shares in the last quarter. Finally, Spirepoint Private Client LLC grew its stake in shares of Argan by 3.1% during the fourth quarter. Spirepoint Private Client LLC now owns 1,231 shares of the construction company's stock valued at $386,000 after buying an additional 37 shares during the last quarter. Hedge funds and other institutional investors own 79.43% of the company's stock.

Argan Stock Up 0.3%

Shares of AGX stock traded up $1.85 on Wednesday, reaching $605.76. The company's stock had a trading volume of 224,029 shares, compared to its average volume of 600,516. Argan has a 12-month low of $126.07 and a 12-month high of $618.87. The company has a market capitalization of $8.45 billion, a P/E ratio of 62.19 and a beta of 0.46. The stock's 50 day simple moving average is $474.95 and its 200-day simple moving average is $377.79.

Argan (NYSE:AGX - Get Free Report) last issued its quarterly earnings data on Thursday, March 26th. The construction company reported $3.47 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.99 by $1.48. Argan had a return on equity of 33.62% and a net margin of 14.59%.The company had revenue of $262.05 million for the quarter, compared to the consensus estimate of $255.32 million. During the same quarter last year, the business posted $2.22 earnings per share. The firm's revenue was up 12.7% compared to the same quarter last year.

Argan announced that its board has authorized a share buyback plan on Wednesday, April 8th that permits the company to buyback $200.00 million in outstanding shares. This buyback authorization permits the construction company to reacquire up to 2.5% of its stock through open market purchases. Stock buyback plans are typically a sign that the company's leadership believes its stock is undervalued.

Argan Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, April 30th. Shareholders of record on Wednesday, April 22nd will be given a dividend of $0.50 per share. The ex-dividend date is Wednesday, April 22nd. This represents a $2.00 dividend on an annualized basis and a yield of 0.3%. Argan's dividend payout ratio (DPR) is presently 20.53%.

About Argan

Argan, Inc NYSE: AGX is a holding company that provides professional technical and management services to the power generation and renewable energy industries. Through its wholly owned subsidiaries, the company delivers engineering, procurement and construction management (EPCM), commissioning and operations and maintenance (O&M) services for a broad range of energy facilities. Argan focuses on projects for utility, industrial and municipally owned clients, helping to bring efficient thermal and renewable energy plants into operation and maintain optimal performance over the asset life cycle.

The company's principal subsidiaries include Gemma Power Systems, which specializes in turnkey construction of combined-cycle, simple-cycle, cogeneration and renewable energy plants; Atlantic Projects Company, which provides electrical balance-of-plant, control systems, instrumentation and commissioning services; and Infrastructure Solutions, which offers industrial maintenance, outage support and modification services.

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