Argan (NYSE:AGX) Shares Down 8.1% - Should You Sell?

Key Points

• Argan shares fell 8.1% to about $401.43, with trading volume below its daily average. The stock remains well below its 50-day and 200-day moving averages of $558.24 and $584.91, respectively.
• The company reported strong quarterly results, posting $3.76 in EPS versus the $2.64 estimate and revenue of $383.98 million versus the $300.53 million consensus; revenue grew 61.5% year over year.
• Analyst sentiment is mixed but leans positive, with a “Moderate Buy” consensus and an average price target of $437.50. However, insiders sold $87.6 million of stock over the past 90 days, while Piper Sandler initiated coverage with an “underweight” rating and a $273 target.

Argan, Inc. (NYSE:AGX - Get Free Report) was down 8.1% during trading on Wednesday . The company traded as low as $405.33 and last traded at $401.4260. 319,599 shares changed hands during mid-day trading, a decline of 17% from the average daily volume of 386,045 shares. The stock had previously closed at $436.78.

Wall Street Analyst Weigh In

AGX has been the topic of a number of recent research reports. Weiss Ratings upgraded shares of Argan from a "buy (b-)" rating to a "buy (b)" rating in a research report on Thursday, August 27th. Wall Street Zen raised Argan from a "hold" rating to a "buy" rating in a research report on Saturday. Freedom Broker raised Argan from a "hold" rating to a "strong-buy" rating in a research report on Friday, September 4th. Piper Sandler assumed coverage on shares of Argan in a research report on Tuesday. They set an "underweight" rating and a $273.00 price target on the stock. Finally, Zacks Research cut Argan from a "strong-buy" rating to a "hold" rating in a research note on Friday, August 7th. One research analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, three have issued a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average target price of $437.50.

Argan Stock Performance

The firm has a market capitalization of $5.64 billion, a price-to-earnings ratio of 31.78, a P/E/G ratio of 3.11 and a beta of 0.57. The business has a fifty day moving average price of $558.24 and a 200 day moving average price of $584.91.

Argan (NYSE:AGX - Get Free Report) last released its quarterly earnings data on Wednesday, September 2nd. The construction company reported $3.76 EPS for the quarter, topping analysts' consensus estimates of $2.64 by $1.12. The firm had revenue of $383.98 million during the quarter, compared to the consensus estimate of $300.53 million. Argan had a net margin of 15.09% and a return on equity of 38.51%. The firm's revenue was up 61.5% on a year-over-year basis. During the same quarter in the previous year, the company posted $2.50 earnings per share. On average, analysts expect that Argan, Inc. will post 13.44 earnings per share for the current year.

Insider Buying and Selling

In related news, CFO Joshua Baugher sold 760 shares of Argan stock in a transaction that occurred on Wednesday, June 17th. The shares were sold at an average price of $733.30, for a total transaction of $557,308.00. Following the transaction, the chief financial officer owned 1,479 shares of the company's stock, valued at $1,084,550.70. This trade represents a 33.94% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Director John Jeffrey, Jr. sold 5,716 shares of Argan stock in a transaction dated Friday, July 31st. The shares were sold at an average price of $579.64, for a total value of $3,313,222.24. Following the completion of the sale, the director directly owned 2,533 shares in the company, valued at $1,468,228.12. This represents a 69.29% decrease in their position. The SEC filing for this sale provides additional information. In the last 90 days, insiders sold 127,973 shares of company stock worth $87,554,828. Insiders own 2.99% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds have recently modified their holdings of AGX. Millennium Management LLC increased its holdings in shares of Argan by 12.2% during the first quarter. Millennium Management LLC now owns 117,805 shares of the construction company's stock worth $15,452,000 after buying an additional 12,854 shares in the last quarter. NewEdge Advisors LLC boosted its stake in shares of Argan by 118.3% in the 1st 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 last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its holdings in Argan by 13.4% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 35,567 shares of the construction company's stock worth $4,665,000 after acquiring an additional 4,196 shares during the period. Intech Investment Management LLC lifted its stake in Argan by 37.3% in 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 period. Finally, Hsbc Holdings PLC acquired a new stake in shares of Argan in the 2nd quarter valued at about $286,000. Institutional investors own 79.43% of the company's stock.

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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