Zacks Research Upgrades Argan (NYSE:AGX) to Strong-Buy

Key Points

• Zacks Research upgraded Argan (NYSE:AGX) from Hold to Strong-Buy, adding to a generally constructive analyst outlook on the stock.
• Argan reported better-than-expected quarterly results, with EPS of $3.24 versus $2.31 expected and revenue of $290.95 million versus $256.03 million anticipated, while revenue jumped 50.2% year over year.
• The company’s board approved a $200 million stock buyback, and recent filings show notable insider selling as well as continued strong ownership by institutional investors, which hold about 79.43% of the shares.

Argan (NYSE:AGX - Get Free Report) was upgraded by equities researchers at Zacks Research from a "hold" rating to a "strong-buy" rating in a note issued to investors on Wednesday,Zacks.com reports.

Several other research analysts have also recently issued reports on AGX. Freedom Capital upgraded Argan to a "hold" rating in a research note on Tuesday, March 10th. JPMorgan Chase & Co. raised shares of Argan from a "neutral" rating to an "overweight" rating and set a $550.00 price objective on the stock in a report on Friday, March 27th. 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 note on Friday, March 27th. Lake Street Capital boosted their target price on shares of Argan from $375.00 to $600.00 and gave the company a "hold" rating in a research report on Friday, June 5th. Finally, Weiss Ratings reaffirmed a "buy (b)" rating on shares of Argan in a report on Monday, April 6th. One analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating and three have given a Hold rating to the company. Based on data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average price target of $470.40.

Argan Trading Up 2.2%

NYSE:AGX opened at $748.66 on Wednesday. The company has a market cap of $10.50 billion, a PE ratio of 65.79 and a beta of 0.58. Argan has a twelve month low of $196.90 and a twelve month high of $791.38. The company's 50 day moving average is $671.54 and its two-hundred day moving average is $501.64.

Argan (NYSE:AGX - Get Free Report) last announced its quarterly earnings data on Thursday, June 4th. The construction company reported $3.24 earnings per share for the quarter, beating analysts' consensus estimates of $2.31 by $0.93. The firm had revenue of $290.95 million for the quarter, compared to analyst estimates of $256.03 million. Argan had a net margin of 15.48% and a return on equity of 36.89%. The business's quarterly revenue was up 50.2% compared to the same quarter last year. During the same period in the previous year, the company earned $1.60 earnings per share. As a group, analysts expect that Argan will post 12.6 EPS for the current fiscal year.

Argan announced that its board has approved a stock buyback plan on Wednesday, April 8th that permits the company to buyback $200.00 million in outstanding shares. This buyback authorization permits the construction company to buy up to 2.5% of its stock through open market purchases. Stock buyback plans are typically an indication that the company's board believes its shares are undervalued.

Insider Buying and Selling at Argan

In other news, CEO David Hibbert Watson sold 1,880 shares of the firm's stock in a transaction dated 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 sale, the chief executive officer directly owned 40,005 shares in the company, valued at $28,297,536.75. This trade represents a 4.49% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Peter W. Getsinger sold 2,000 shares of the firm's stock in a transaction that occurred on Wednesday, June 17th. The shares were sold at an average price of $699.00, for a total value of $1,398,000.00. Following the completion of the sale, the director directly owned 4,880 shares in the company, valued at approximately $3,411,120. The trade was a 29.07% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders sold 186,800 shares of company stock worth $123,296,561. 6.69% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Argan

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Maverick Capital Ltd. acquired a new position in shares of Argan during the 4th quarter worth about $137,503,000. First Trust Advisors LP increased its stake in Argan by 69.8% during the 3rd quarter. First Trust Advisors LP now owns 559,466 shares of the construction company's stock worth $151,084,000 after buying an additional 230,073 shares in the last quarter. Balyasny Asset Management L.P. raised its holdings in shares of Argan by 168.9% during the second quarter. Balyasny Asset Management L.P. now owns 253,365 shares of the construction company's stock valued at $55,862,000 after acquiring an additional 159,149 shares during the last quarter. Invesco Ltd. lifted its position in shares of Argan by 172.5% in the second quarter. Invesco Ltd. now owns 229,893 shares of the construction company's stock valued at $50,687,000 after acquiring an additional 145,516 shares in the last quarter. Finally, TD Asset Management Inc acquired a new stake in shares of Argan in the third quarter worth approximately $35,629,000. 79.43% of the stock is owned by hedge funds and other 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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