Argan (NYSE:AGX) Stock Price Down 6.6% - Time to Sell?

Key Points

• Argan shares fell 6.6% on Thursday, with trading volume well below average as the stock slipped from a prior close of $609.24 to around $569.
• The company recently posted strong quarterly results, beating EPS and revenue expectations, while analysts currently rate the stock a Moderate Buy with an average target price of $470.40.
• Argan also announced a quarterly dividend and a $200 million share buyback program, though recent insider selling totaled 170,619 shares over the past 90 days.

Argan, Inc. (NYSE:AGX - Get Free Report) traded down 6.6% during trading on Thursday . The stock traded as low as $568.34 and last traded at $569.0840. Approximately 27,208 shares traded hands during mid-day trading, a decline of 93% from the average daily volume of 395,322 shares. The stock had previously closed at $609.24.

Wall Street Analyst Weigh In

AGX has been the topic of a number of recent research reports. Zacks Research upgraded Argan from a "hold" rating to a "strong-buy" rating in a research note on Wednesday, June 24th. Lake Street Capital raised their target price on Argan from $375.00 to $600.00 and gave the company a "hold" rating in a report on Friday, June 5th. The Goldman Sachs Group boosted 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. JPMorgan Chase & Co. upgraded Argan from a "neutral" rating to an "overweight" rating and set a $550.00 price target for the company in a report on Friday, March 27th. Finally, Weiss Ratings reaffirmed a "buy (b)" rating on shares of Argan in a research report on Thursday, July 2nd. One equities research 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 company. According to data from MarketBeat.com, the company has an average rating of "Moderate Buy" and an average target price of $470.40.

Argan Stock Performance

The company has a market capitalization of $7.85 billion, a PE ratio of 49.37 and a beta of 0.57. The company has a 50 day moving average price of $685.31 and a 200 day moving average price of $538.22.

Argan (NYSE:AGX - Get Free Report) last released its quarterly earnings data on Thursday, June 4th. The construction company reported $3.24 EPS for the quarter, topping analysts' consensus estimates of $2.31 by $0.93. Argan had a net margin of 15.48% and a return on equity of 36.89%. The firm had revenue of $290.95 million during the quarter, compared to the consensus estimate of $256.03 million. During the same quarter in the previous year, the company posted $1.60 earnings per share. The firm's revenue was up 50.2% on a year-over-year basis. On average, equities analysts forecast that Argan, Inc. will post 12.6 earnings per share for the current fiscal year.

Argan Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, July 31st. Investors of record on Thursday, July 23rd will be paid a dividend of $0.50 per share. The ex-dividend date is Thursday, July 23rd. This represents a $2.00 annualized dividend and a yield of 0.4%. Argan's dividend payout ratio is 17.57%.

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

Insider Buying and Selling

In other Argan news, CEO David Hibbert Watson sold 19,310 shares of Argan stock in a transaction that occurred on Friday, April 17th. The stock was sold at an average price of $602.11, for a total value of $11,626,744.10. Following the completion of the transaction, the chief executive officer directly owned 49,998 shares in the company, valued at $30,104,295.78. The trade was a 27.86% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, CEO Charles Edwin Iv Collins sold 11,068 shares of the stock in a transaction that occurred on Tuesday, April 21st. The stock was sold at an average price of $621.61, for a total value of $6,879,979.48. Following the sale, the chief executive officer owned 30,320 shares in the company, valued at $18,847,215.20. The trade was a 26.74% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 170,619 shares of company stock valued at $113,993,399 over the last 90 days. 6.69% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Argan

Institutional investors have recently modified their holdings of the company. Millennium Management LLC boosted its stake in Argan by 12.2% during the 1st quarter. Millennium Management LLC now owns 117,805 shares of the construction company's stock valued at $15,452,000 after purchasing an additional 12,854 shares during the period. NewEdge Advisors LLC increased its stake in shares of Argan by 118.3% in the first quarter. NewEdge Advisors LLC now owns 5,316 shares of the construction company's stock valued at $697,000 after purchasing an additional 2,881 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its stake in shares of Argan by 13.4% in 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 purchasing an additional 4,196 shares during the period. Intech Investment Management LLC raised its holdings in shares of Argan by 37.3% during the first quarter. Intech Investment Management LLC now owns 8,985 shares of the construction company's stock valued at $1,179,000 after buying an additional 2,442 shares during the last quarter. Finally, Hsbc Holdings PLC acquired a new position in shares of Argan during the second quarter worth approximately $286,000. Institutional investors own 79.43% of the company's stock.

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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