Argan (NYSE:AGX) Shares Down 8.6% - Time to Sell?

Key Points

• Argan shares fell 8.6% on Monday, trading as low as $648.10 after closing at $694.72 the prior session, with volume well below average.
• The company posted strong quarterly results, beating estimates with EPS of $3.24 versus $2.31 expected and revenue of $290.95 million, up 50.2% year over year.
• Analysts are mixed but generally constructive: the stock has a Moderate Buy consensus, while the company also recently authorized a $200 million share repurchase plan and paid a quarterly dividend of $0.50 per share.

Argan, Inc. (NYSE:AGX - Get Free Report) shares fell 8.6% on Monday . The company traded as low as $648.10 and last traded at $635.0090. 80,165 shares traded hands during mid-day trading, a decline of 80% from the average session volume of 406,763 shares. The stock had previously closed at $694.72.

Analyst Ratings Changes

Several research analysts have issued reports on the company. The Goldman Sachs Group upped their price target on Argan from $399.00 to $518.00 and gave the company a "buy" rating in a report on Friday, March 27th. JPMorgan Chase & Co. raised shares of Argan from a "neutral" rating to an "overweight" rating and set a $550.00 price target on the stock in a research note on Friday, March 27th. Zacks Research downgraded shares of Argan from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, May 26th. Lake Street Capital boosted their price objective on shares of Argan from $375.00 to $600.00 and gave the company a "hold" rating in a report on Friday. Finally, Weiss Ratings reissued a "buy (b)" rating on shares of Argan in a report on Monday, April 6th. Four analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the stock. Based on data from MarketBeat, Argan presently has a consensus rating of "Moderate Buy" and an average target price of $470.40.

Argan Price Performance

The company's fifty day simple moving average is $636.32 and its two-hundred day simple moving average is $469.11. The stock has a market cap of $8.57 billion, a price-to-earnings ratio of 54.15 and a beta of 0.58.

Argan (NYSE:AGX - Get Free Report) last announced its earnings results on Thursday, June 4th. The construction company reported $3.24 earnings per share for the quarter, topping analysts' consensus estimates of $2.31 by $0.93. The firm had revenue of $290.95 million for the quarter, compared to the consensus estimate of $256.03 million. Argan had a return on equity of 36.89% and a net margin of 15.48%.The company's revenue was up 50.2% compared to the same quarter last year. During the same quarter in the previous year, the business earned $1.60 EPS. On average, analysts forecast that Argan, Inc. will post 11.44 earnings per share for the current year.

Argan Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Thursday, April 30th. Stockholders of record on Wednesday, April 22nd were paid a dividend of $0.50 per share. The ex-dividend date of this dividend was Wednesday, April 22nd. This represents a $2.00 dividend on an annualized basis and a dividend yield of 0.3%. Argan's payout ratio is presently 17.57%.

Argan announced that its Board of Directors has authorized a share repurchase plan on Wednesday, April 8th that authorizes the company to buyback $200.00 million in outstanding shares. This buyback authorization authorizes the construction company to reacquire up to 2.5% of its shares through open market purchases. Shares buyback plans are often a sign that the company's management believes its stock is undervalued.

Insider Buying and Selling

In other Argan news, Director John Ronald Jr. Jeffrey sold 2,698 shares of the stock in a transaction on Monday, April 27th. The stock was sold at an average price of $664.84, for a total value of $1,793,738.32. Following the sale, the director owned 2,000 shares in the company, valued at $1,329,680. This trade represents a 57.43% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director William F. Leimkuhler sold 800 shares of the firm's stock in a transaction dated Tuesday, April 28th. The stock was sold at an average price of $619.88, for a total transaction of $495,904.00. Following the completion of the transaction, the director directly owned 500 shares in the company, valued at $309,940. This represents a 61.54% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 64,543 shares of company stock worth $39,054,956 in the last ninety days. Corporate insiders own 6.69% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in AGX. Maverick Capital Ltd. purchased a new position in Argan in the 4th quarter worth about $137,503,000. First Trust Advisors LP increased its stake in shares of Argan by 69.8% during the third quarter. First Trust Advisors LP now owns 559,466 shares of the construction company's stock valued at $151,084,000 after buying an additional 230,073 shares during the period. Balyasny Asset Management L.P. increased its stake in shares of Argan by 168.9% during the second quarter. Balyasny Asset Management L.P. now owns 253,365 shares of the construction company's stock valued at $55,862,000 after buying an additional 159,149 shares during the period. Invesco Ltd. increased its stake in shares of Argan by 172.5% during the second quarter. Invesco Ltd. now owns 229,893 shares of the construction company's stock valued at $50,687,000 after buying an additional 145,516 shares during the period. Finally, TD Asset Management Inc purchased a new position in shares of Argan during the third quarter valued at $35,629,000. Hedge funds and other 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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