Argan Stock Story


USD 36.13  0.52  1.46%   

It looks like Hill International will continue to recover much faster as its share price surged up 0.60% today to Argan's 1.1823%. As many millenniums are excited about industrials space, we are going to shadow both, Argan and Hill International as a potential short-term opportunity. We are going to inspect some of the competitive aspects of both Argan and Hill International.
Published over two months ago
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Will Argan (NYSE:AGX) shadow Hill International price surge?

By analyzing existing technical and fundamental indicators between Argan and Hill International, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Hill International with a short position in Argan. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Argan has an asset utilization ratio of 124.3 percent. This suggests that the company is making $1.24 for each dollar of assets. An increasing asset utilization means that Argan Inc is more efficient with each dollar of assets it utilizes for everyday operations.

How important is Argan's Liquidity

Argan financial leverage refers to using borrowed capital as a funding source to finance Argan Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Argan financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Argan's total debt and its cash.

How does Argan utilize its cash?

To perform a cash flow analysis of Argan, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Argan is receiving and how much cash it distributes out in a given period. The Argan cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Argan Net Cash Flow from Operations is fairly stable at the moment as compared to the past year. Argan reported Net Cash Flow from Operations of 28.41 Million in 2021

Purchase by John Jeffrey of 1000 shares of Argan

Legal trades by Argan insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Argan insider trading alert for perchase of common stock by John Jeffrey, the corporate stakeholder, on 9th of May 2022. This event was filed by Argan Inc with SEC on 2022-05-09. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

What is driving Argan Investor Appetite?

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Let me now analyze Argan revenue. Based on the latest financial disclosure, Argan Inc reported 509.37 M of revenue. This is 85.44% lower than that of the Industrials sector and 90.93% lower than that of the Engineering & Construction industry. The revenue for all United States stocks is 94.6% higher than that of Argan. As for Hill International we see revenue of 305.09 M, which is 94.57% lower than that of the Engineering & Construction

3.5 B
AGX509.37 Million11.81
Sector3.5 Billion81.12
HIL305.09 Million7.07

Argan showing appearance of lower volatility

Current Information Ratio is up to 0.08. Price may slide again. Argan Inc has relatively low volatility with skewness of -1.28 and kurtosis of 6.94. However, we advise all investors to independently investigate Argan Inc to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Argan's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Argan's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Argan Implied Volatility

Argan's implied volatility exposes the market's sentiment of Argan Inc stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Argan's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Argan stock will not fluctuate a lot when Argan's options are near their expiration.

Our Takeaway on Argan Investment

While some other companies under the engineering & construction industry are still a bit expensive, Argan may offer a potential longer-term growth to investors. The bottom line, as of the 5th of June 2022, our research shows that Argan is a rather very steady investment opportunity with a close to average chance of distress in the next two years. From a slightly different view, the entity currently appears to be fairly valued. Our final 90 days buy-sell recommendation on the company is Buy.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Argan Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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