Argan (NYSE:AGX) Sets New 1-Year High - What's Next?

Key Points

• Argan hit a new 52-week high, trading as high as $620.00 and last at $582.46 on volume of 808,565 shares, with a market cap of about $8.31 billion and a PE of 61.15.
• Several analysts raised ratings and targets (Goldman Sachs to $518, JPMorgan to $550), leaving a consensus price target of $425.40 and an average rating of “Moderate Buy”.
• Argan posted a strong quarter—EPS $3.47 vs. $1.99 estimate and revenue up 12.7% to $262.05M—while announcing a $0.50 quarterly dividend and a $200M share repurchase plan (up to 2.5% of shares); insiders have sold roughly 42,281 shares (~$19.1M) in the last 90 days.

Argan, Inc. (NYSE:AGX - Get Free Report) hit a new 52-week high on Monday . The company traded as high as $620.00 and last traded at $582.4610, with a volume of 808565 shares changing hands. The stock had previously closed at $597.88.

Analyst Upgrades and Downgrades

AGX has been the topic of a number of recent research reports. The Goldman Sachs Group increased their price target on Argan from $399.00 to $518.00 and gave the stock a "buy" rating in a research report on Friday, March 27th. Zacks Research raised shares of Argan from a "hold" rating to a "strong-buy" rating in a research report on Tuesday, March 31st. Wall Street Zen raised shares of Argan from a "hold" rating to a "buy" rating in a report on Saturday, March 28th. JPMorgan Chase & Co. raised shares of Argan from a "neutral" rating to an "overweight" rating and set a $550.00 price objective for the company in a research note on Friday, March 27th. Finally, Lake Street Capital upped their target price on Argan from $325.00 to $375.00 and gave the stock a "hold" rating in a report on Friday, March 27th. One research analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating and four have issued a Hold rating to the stock. Based on data from MarketBeat.com, Argan has an average rating of "Moderate Buy" and a consensus price target of $425.40.

Argan Price Performance

The business's 50-day moving average price is $485.17 and its 200-day moving average price is $383.19. The firm has a market capitalization of $8.31 billion, a PE ratio of 61.15 and a beta of 0.46.

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

Argan Announces Dividend

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

Argan declared that its Board of Directors has approved a share repurchase program on Wednesday, April 8th that permits the company to repurchase $200.00 million in outstanding shares. This repurchase authorization permits the construction company to buy up to 2.5% of its stock through open market purchases. Stock repurchase programs are generally a sign that the company's board of directors believes its stock is undervalued.

Insiders Place Their Bets

In other Argan news, Director John Ronald Jr. Jeffrey sold 4,556 shares of the company's stock in a transaction on Tuesday, March 31st. The stock was sold at an average price of $539.85, for a total transaction of $2,459,556.60. Following the transaction, the director owned 3,636 shares of the company's stock, valued at approximately $1,962,894.60. This represents a 55.62% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director Cynthia Flanders sold 19,000 shares of the stock in a transaction on Wednesday, January 21st. The shares were 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 owned 26,207 shares in the company, valued at $10,134,246.90. The trade was a 42.03% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 42,281 shares of company stock valued at $19,118,622 over the last ninety days. Insiders own 6.69% of the company's stock.

Hedge Funds Weigh In On Argan

Several hedge funds have recently added to or reduced their stakes in the company. Millennium Management LLC lifted its holdings in Argan by 12.2% during the first quarter. Millennium Management LLC now owns 117,805 shares of the construction company's stock worth $15,452,000 after acquiring an additional 12,854 shares during the period. NewEdge Advisors LLC raised its holdings in shares of Argan by 118.3% during the first quarter. NewEdge Advisors LLC now owns 5,316 shares of the construction company's stock valued at $697,000 after acquiring an additional 2,881 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its holdings in shares of Argan by 13.4% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 35,567 shares of the construction company's stock valued at $4,665,000 after acquiring an additional 4,196 shares in the last quarter. Intech Investment Management LLC lifted its stake in Argan by 37.3% in the first quarter. Intech Investment Management LLC now owns 8,985 shares of the construction company's stock worth $1,179,000 after acquiring an additional 2,442 shares during the period. Finally, Hsbc Holdings PLC purchased a new stake in Argan in the second quarter worth $286,000. Institutional investors own 79.43% of the company's stock.

Argan Company Profile

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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