Argan (NYSE:AGX) Trading Down 6.7% - What's Next?

Key Points

• Argan shares fell 6.7% to about $516.22 in mid-day trading, with volume down 78% from the average session. The stock remains below its 50-day moving average of $639.37 but above its 200-day average of $577.77.
• Analyst sentiment is mixed but leans positive: Argan has a consensus “Moderate Buy” rating and a $470.40 target price, while recent firms downgraded or maintained the stock and Lake Street raised its target to $600.
• The company reported strong quarterly results, with EPS of $3.24 beating estimates by $0.93 and revenue rising 50.2% year over year to $290.95 million. Argan also pays a $0.50 quarterly dividend, while insiders have sold approximately $87.6 million of stock over the past three months.

Argan, Inc. (NYSE:AGX - Get Free Report)'s share price was down 6.7% during mid-day trading on Wednesday . The company traded as low as $518.12 and last traded at $516.2230. 82,815 shares traded hands during trading, a decline of 78% from the average session volume of 384,056 shares. The stock had previously closed at $553.03.

Analyst Upgrades and Downgrades

AGX has been the topic of several recent research reports. Weiss Ratings cut shares of Argan from a "buy (b)" rating to a "buy (b-)" rating in a research note on Tuesday, August 11th. Zacks Research lowered shares of Argan from a "strong-buy" rating to a "hold" rating in a research report on Friday, August 7th. Finally, Lake Street Capital increased their price target on shares of Argan from $375.00 to $600.00 and gave the stock a "hold" rating in a research report on Friday, June 5th. Four research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company. According to data from MarketBeat, Argan currently has an average rating of "Moderate Buy" and a consensus target price of $470.40.

Argan Stock Down 4.2%

The stock has a market cap of $7.43 billion, a P/E ratio of 46.57 and a beta of 0.61. The firm has a 50 day moving average price of $639.37 and a 200 day moving average price of $577.77.

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

Argan Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, July 31st. Investors of record on Thursday, July 23rd were issued a $0.50 dividend. The ex-dividend date of this dividend was Thursday, July 23rd. This represents a $2.00 annualized dividend and a yield of 0.4%. Argan's dividend payout ratio is currently 17.57%.

Insider Activity

In other Argan news, Chairman William F. Griffin, Jr. sold 20,000 shares of the business's stock in a transaction on Monday, June 22nd. The shares were sold at an average price of $760.43, for a total value of $15,208,600.00. Following the sale, the chairman owned 40,976 shares in the company, valued at $31,159,379.68. The trade was a 32.80% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Joshua Scott Baugher sold 760 shares of the stock in a transaction that occurred on Wednesday, June 17th. The shares were sold at an average price of $733.30, for a total value of $557,308.00. Following the transaction, the chief financial officer directly owned 1,479 shares of the company's stock, valued at approximately $1,084,550.70. The trade was a 33.94% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 127,973 shares of company stock valued at $87,554,828 in the last three months. 2.99% of the stock is currently owned by insiders.

Institutional Trading of Argan

A number of large investors have recently made changes to their positions in AGX. Western Wealth Management LLC purchased a new position in Argan in the first quarter worth about $25,000. Danske Bank A S bought a new stake in shares of Argan in the 3rd quarter valued at approximately $27,000. Montag A & Associates Inc. bought a new stake in shares of Argan in the 4th quarter valued at approximately $30,000. University of Texas Texas AM Investment Management Co. purchased a new position in shares of Argan in the 4th quarter worth approximately $30,000. Finally, Hilton Head Capital Partners LLC purchased a new position in shares of Argan in the 4th quarter worth approximately $31,000. 79.43% of the stock is currently owned by institutional investors.

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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