Argan (NYSE:AGX) Trading Down 7.5% - Should You Sell?

Key Points

• Argan shares fell 7.5% to about $526 in Monday trading, with volume down 82% from the average session. The stock’s current price remains above the analysts’ average target of $470.40.
• Analysts maintain a generally positive outlook, with one Strong Buy, four Buy and three Hold ratings, resulting in a “Moderate Buy” consensus. Argan recently beat quarterly estimates, reporting $3.24 EPS and $290.95 million in revenue, up 50.2% year over year.
• The company announced a $0.50 quarterly dividend and has authorization to repurchase up to $200 million of stock. However, insiders have sold 131,407 shares worth approximately $89.9 million over the past 90 days.

Argan, Inc. (NYSE:AGX - Get Free Report)'s stock price fell 7.5% during trading on Monday . The stock traded as low as $525.81 and last traded at $526.3010. 72,659 shares traded hands during mid-day trading, a decline of 82% from the average session volume of 395,876 shares. The stock had previously closed at $568.92.

Analyst Ratings Changes

Several equities research analysts have recently weighed in on AGX shares. Zacks Research raised Argan from a "hold" rating to a "strong-buy" rating in a research report on Wednesday, June 24th. Lake Street Capital boosted their price target on Argan from $375.00 to $600.00 and gave the stock a "hold" rating in a research report on Friday, June 5th. Finally, Weiss Ratings restated a "buy (b)" rating on shares of Argan in a report on Thursday, July 2nd. One research analyst has rated the stock with a Strong Buy rating, four have given a Buy rating and three have given a Hold rating to the company's stock. According to MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average price target of $470.40.

Argan Stock Down 6.0%

The firm has a market cap of $7.49 billion, a P/E ratio of 46.95 and a beta of 0.57. The business's 50 day moving average is $668.69 and its 200-day moving average is $551.09.

Argan (NYSE:AGX - Get Free Report) last released its earnings results on Thursday, June 4th. The construction company reported $3.24 earnings per share 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 the consensus estimate of $256.03 million. During the same quarter in the previous year, the firm earned $1.60 EPS. The company's revenue was up 50.2% on a year-over-year basis. As a group, equities analysts predict that Argan, Inc. will post 12.6 earnings per share for the current year.

Argan Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Friday, July 31st. Stockholders of record on Thursday, July 23rd will be given a $0.50 dividend. The ex-dividend date is Thursday, July 23rd. This represents a $2.00 annualized dividend and a dividend yield of 0.4%. Argan's dividend payout ratio (DPR) is presently 17.57%.

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

Insider Buying and Selling at Argan

In related news, Director Karen Sweeney sold 300 shares of the firm's stock in a transaction on Wednesday, June 17th. The stock was sold at an average price of $705.00, for a total transaction of $211,500.00. Following the transaction, the director directly owned 1,548 shares in the company, valued at $1,091,340. This trade represents a 16.23% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CEO David Hibbert Watson sold 1,880 shares of Argan stock in a transaction on Tuesday, June 16th. The stock was sold at an average price of $707.35, for a total transaction of $1,329,818.00. Following the completion of the transaction, the chief executive officer directly owned 40,005 shares of the company's stock, valued at approximately $28,297,536.75. This represents a 4.49% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders sold 131,407 shares of company stock worth $89,930,342. 2.99% of the stock is owned by insiders.

Hedge Funds Weigh In On Argan

A number of hedge funds and other institutional investors have recently bought and sold shares of AGX. International Assets Investment Management LLC lifted its holdings in shares of Argan by 2.0% in the 1st quarter. International Assets Investment Management LLC now owns 775 shares of the construction company's stock worth $443,000 after purchasing an additional 15 shares during the last quarter. PNC Financial Services Group Inc. boosted its holdings in shares of Argan by 5.9% during the fourth 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 during the period. Baader Bank Aktiengesellschaft grew 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 worth $2,734,000 after acquiring an additional 30 shares during the last quarter. National Bank of Canada FI increased its holdings 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 acquiring an additional 31 shares during the period. Finally, Pallas Capital Advisors LLC increased its holdings in shares of Argan by 1.3% in the 4th quarter. Pallas Capital Advisors LLC now owns 2,564 shares of the construction company's stock worth $803,000 after acquiring 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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