Argan (NYSE:AGX) Trading Down 11.9% - Here's What Happened

Key Points

• Argan shares fell 11.9% on Tuesday, trading as low as $652.71 amid heavy volume that was far below normal, after closing at $725.23 the previous day.
• Despite the selloff, the company recently posted strong quarterly results, with EPS of $3.24 versus the $2.31 estimate and revenue of $290.95 million, up 50.2% year over year.
• Analyst sentiment remains broadly positive, with several firms raising ratings or price targets and the stock carrying a Moderate Buy consensus; Argan also recently announced a quarterly dividend and a $200 million share repurchase program.

Argan, Inc. (NYSE:AGX - Get Free Report)'s stock price traded down 11.9% during trading on Tuesday . The company traded as low as $652.71 and last traded at $638.6690. Approximately 84,854 shares were traded during mid-day trading, a decline of 79% from the average daily volume of 402,976 shares. The stock had previously closed at $725.23.

Analysts Set New Price Targets

A number of research analysts have weighed in on the stock. Freedom Capital upgraded shares of Argan to a "hold" rating in a research report on Tuesday, March 10th. The Goldman Sachs Group increased their price objective on shares of Argan from $399.00 to $518.00 and gave the stock a "buy" rating in a research report on Friday, March 27th. Weiss Ratings reiterated a "buy (b)" rating on shares of Argan in a report on Thursday. 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 report on Friday, March 27th. Finally, Zacks Research upgraded Argan from a "hold" rating to a "strong-buy" rating in a research note on Wednesday, June 24th. One equities research analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $470.40.

Argan Trading Down 8.8%

The stock's 50-day simple moving average is $689.69 and its 200-day simple moving average is $522.65. The stock has a market cap of $9.27 billion, a price-to-earnings ratio of 58.27 and a beta of 0.57.

Argan (NYSE:AGX - Get Free Report) last issued 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. Argan had a return on equity of 36.89% and a net margin of 15.48%.The company had revenue of $290.95 million for the quarter, compared to analysts' expectations of $256.03 million. During the same quarter last year, the business earned $1.60 earnings per share. Argan's revenue was up 50.2% on a year-over-year basis. On average, equities research analysts forecast that Argan, Inc. will post 12.6 earnings per share for the current year.

Argan Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Friday, July 31st. Stockholders of record on Thursday, July 23rd will be paid 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 Thursday, July 23rd. Argan's dividend payout ratio (DPR) is presently 17.57%.

Argan declared that its Board of Directors has initiated a share repurchase plan on Wednesday, April 8th that allows the company to repurchase $200.00 million in shares. This repurchase authorization allows the construction company to buy up to 2.5% of its stock through open market purchases. Stock repurchase plans are generally an indication that the company's board of directors believes its shares are undervalued.

Insider Buying and Selling

In related news, CFO Joshua Scott Baugher sold 760 shares of the company's stock in a transaction that occurred on Wednesday, June 17th. The stock was sold at an average price of $733.30, for a total value of $557,308.00. Following the sale, the chief financial officer directly owned 1,479 shares in the company, valued at $1,084,550.70. This represents a 33.94% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, CEO David Hibbert Watson sold 1,880 shares of the stock in a transaction dated Tuesday, June 16th. The stock was sold at an average price of $707.35, for a total value of $1,329,818.00. Following the sale, the chief executive officer owned 40,005 shares of the company's stock, valued at approximately $28,297,536.75. The trade was a 4.49% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders have sold 179,663 shares of company stock valued at $119,410,408. Corporate insiders own 6.69% of the company's stock.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the business. M&T Bank Corp purchased a new position in shares of Argan in the fourth quarter valued at $478,000. Covenant Asset Management LLC purchased a new stake in Argan during the fourth quarter valued at about $2,748,000. Thames Capital Management LLC lifted its position in Argan by 25.2% in the 4th quarter. Thames Capital Management LLC now owns 51,794 shares of the construction company's stock worth $16,228,000 after buying an additional 10,411 shares during the last quarter. Jefferies Financial Group Inc. bought a new position in shares of Argan during the 4th quarter valued at $5,574,000. Finally, State of Alaska Department of Revenue lifted its stake in shares of Argan by 279.7% in the 4th quarter. State of Alaska Department of Revenue now owns 2,821 shares of the construction company's stock valued at $883,000 after acquiring an additional 2,078 shares during the last quarter. 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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