This Stock Is Up 127%, and a New $16 Million Position Suggests There’s Room to Grow
Key Points
Hong Kong-based Alpine Investment Management added 60,000 shares of Argan in the third quarter.
The shares were worth about $16.20 million as of September 30.
The position represents 13.62% of the fund’s 13F reportable assets under management, making it the fourth-largest holding.
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Hong Kong-based Alpine Investment Management initiated a new position in Argan (NYSE:AGX) worth approximately $16.20 million, according to a November 12 SEC filing.
What Happened
According to a filing with the Securities and Exchange Commission dated November 12, Alpine Investment Management opened a new position in Argan (NYSE:AGX), acquiring 60,000 shares valued at $16.20 million as of September 30.
What Else to Know
Argan now accounts for 13.62% of Alpine Investment Management Ltd’s reportable U.S. equity assets.
Top holdings after the filing include:
- NYSE: YMM: $51.88 million (43.6% of AUM)
- NASDAQ: JOYY: $33.70 million (28.3% of AUM)
- NYSE: LU: $17.15 million (14.4% of AUM)
- NYSE: AGX: $16.20 million (13.6% of AUM)
As of Friday, AGX shares were priced at $325.96, up 127% over the past year and well outperforming the S&P 500's 17% gain in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Friday) | $325.96 |
| Market capitalization | $4.52 billion |
| Revenue (TTM) | $915.03 million |
| Net income (TTM) | $119.93 million |
Company Snapshot
- Argan provides engineering, procurement, construction, commissioning, operations management, maintenance, and consulting services for power generation and renewable energy markets, as well as industrial fabrication and telecommunications infrastructure solutions.
- The company generates revenue through large-scale project contracts in the power industry, industrial field services, and telecommunications infrastructure, leveraging expertise in design, construction, and project management for energy and utility sectors.
- It serves independent power producers, public utilities, energy plant construction companies, government agencies, and commercial customers across the United States.
Argan is a diversified engineering and construction firm with a focus on the power generation, renewable energy, and infrastructure markets. The company leverages its technical capabilities and project management expertise to deliver complex projects for utility and industrial clients nationwide.
Foolish Take
Argan stock is on a huge tear, and its latest earnings help explain why. In December, the company reported a record project backlog of roughly $3.0 billion, more than double where it stood at the start of the fiscal year, driven largely by new gas-fired power projects in Texas. That backlog translates into years of revenue already spoken for, not projections on a slide.
Financially, the story is getting cleaner, not riskier. Third-quarter net income rose to $30.7 million, or $2.17 per share, while EBITDA climbed to $40.3 million with margins expanding to 16%. For the first nine months of the fiscal year, net income jumped more than 60% year over year, and Argan ended the quarter with over $726 million in cash and investments and no debt. That kind of balance sheet matters when capital intensity rises.
Contextually, this position fits alongside other concentrated bets in industrial and China-linked names, suggesting a preference for hard assets and cash generation rather than momentum tech. Ultimately, Argan’s stock has done very well recently, but its backlog, margins, and liquidity suggest the business has more room to run.
Glossary
13F reportable assets: Assets that institutional investment managers must disclose in quarterly SEC Form 13F filings.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Position: The amount of a particular security or asset held by an investor or fund.
Net position change: The difference in the number or value of shares held in a security after recent buying or selling.
Fund downsizing: A reduction in the total assets or holdings managed by an investment fund, often due to redemptions or sales.
Outperforming: Achieving a higher return compared to a benchmark index or peer group.
Market capitalization: The total value of a company's outstanding shares, calculated as share price times shares outstanding.
Engineering, procurement, construction (EPC): A contracting arrangement where a company designs, procures materials, and builds projects for clients.
Commissioning: The process of testing and verifying that a new facility or project operates as intended before it becomes fully operational.
Independent power producers: Companies that generate electricity for sale to utilities or end users, but are not regulated utilities themselves.
Project management: The discipline of planning, organizing, and overseeing resources to achieve specific project goals within constraints.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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