Argan (NYSE:AGX) Shares Up 6.2% - Should You Buy?

Key Points

• Argan shares rose 6.2% on Monday, with the stock trading as high as $585.75, though volume was far below normal.
• Analysts remain generally bullish after several upgrades, including Zacks moving the stock to strong buy; the consensus rating is Moderate Buy with an average target price of $470.40.
• The company posted strong quarterly results, beating EPS and revenue estimates, and also announced a quarterly dividend plus a $200 million share buyback program.

Argan, Inc. (NYSE:AGX - Get Free Report) shares rose 6.2% during trading on Monday . The company traded as high as $585.75 and last traded at $585.2210. 26,740 shares changed hands during trading, a decline of 93% from the average session volume of 398,086 shares. The stock had previously closed at $551.26.

Wall Street Analysts Forecast Growth

AGX has been the topic of a number of recent research reports. Zacks Research raised Argan from a "hold" rating to a "strong-buy" rating in a research report on Wednesday, June 24th. JPMorgan Chase & Co. upgraded Argan from a "neutral" rating to an "overweight" rating and set a $550.00 price objective for the company in a research report on Friday, March 27th. Lake Street Capital lifted their price objective on Argan from $375.00 to $600.00 and gave the stock a "hold" rating in a report on Friday, June 5th. Weiss Ratings restated a "buy (b)" rating on shares of Argan in a research report on Thursday, July 2nd. Finally, Wall Street Zen raised shares of Argan from a "hold" rating to a "buy" rating in a research note on Saturday, March 28th. One analyst has rated the stock with a Strong Buy rating, four have given a Buy rating and three have assigned a Hold rating to the stock. According to data from MarketBeat, Argan currently has an average rating of "Moderate Buy" and an average target price of $470.40.

Argan Trading Up 9.2%

The firm has a market capitalization of $8.44 billion, a price-to-earnings ratio of 52.88 and a beta of 0.57. The firm has a fifty day moving average price of $679.76 and a 200 day moving average price of $541.39.

Argan (NYSE:AGX - Get Free Report) last released its quarterly earnings results on Thursday, June 4th. The construction company reported $3.24 EPS for the quarter, topping analysts' consensus estimates of $2.31 by $0.93. The business had revenue of $290.95 million for the quarter, compared to analyst estimates of $256.03 million. Argan had a return on equity of 36.89% and a net margin of 15.48%.Argan's revenue for the quarter was up 50.2% on a year-over-year basis. During the same period in the prior year, the company earned $1.60 EPS. As a group, equities analysts predict that Argan, Inc. will post 12.6 EPS for the current fiscal year.

Argan Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Friday, July 31st. Investors of record on Thursday, July 23rd will be issued a $0.50 dividend. 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 Thursday, July 23rd. Argan's payout ratio is currently 17.57%.

Argan declared that its board has initiated a share buyback plan on Wednesday, April 8th that allows the company to repurchase $200.00 million in shares. This repurchase authorization allows the construction company to purchase up to 2.5% of its shares through open market purchases. Shares repurchase plans are typically a sign that the company's leadership believes its stock is undervalued.

Insider Buying and Selling at Argan

In other Argan news, CEO David Hibbert Watson sold 9,993 shares of the stock in a transaction dated Monday, June 15th. The shares were sold at an average price of $651.22, for a total transaction of $6,507,641.46. Following the sale, the chief executive officer owned 40,005 shares of the company's stock, valued at $26,052,056.10. This represents a 19.99% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director William F. Leimkuhler sold 5,000 shares of the business's stock in a transaction dated Tuesday, April 28th. The stock was sold at an average price of $617.41, for a total transaction of $3,087,050.00. Following the completion of the transaction, the director directly owned 36,495 shares of the company's stock, valued at approximately $22,532,377.95. This represents a 12.05% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 148,809 shares of company stock worth $100,841,655 over the last quarter. Corporate insiders own 6.69% of the company's stock.

Hedge Funds Weigh In On Argan

Large investors have recently bought and sold shares of the business. International Assets Investment Management LLC increased its position in Argan by 2.0% in the 1st quarter. International Assets Investment Management LLC now owns 775 shares of the construction company's stock valued at $443,000 after buying an additional 15 shares in the last quarter. PNC Financial Services Group Inc. lifted its stake in Argan by 5.9% during the 4th quarter. PNC Financial Services Group Inc. now owns 541 shares of the construction company's stock valued at $170,000 after acquiring an additional 30 shares in the last quarter. Baader Bank Aktiengesellschaft lifted its position in shares of Argan by 0.6% during the first quarter. Baader Bank Aktiengesellschaft now owns 5,030 shares of the construction company's stock valued at $2,734,000 after purchasing an additional 30 shares in the last quarter. National Bank of Canada FI boosted its stake in shares of Argan by 26.7% in the 3rd quarter. National Bank of Canada FI now owns 147 shares of the construction company's stock worth $40,000 after buying an additional 31 shares during the last quarter. Finally, Pallas Capital Advisors LLC grew its stake in Argan by 1.3% in the 4th 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 during the period. 79.43% of the stock is currently owned by institutional investors and hedge funds.

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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