Argan (AGX) shares soared 12.6% in the last trading session to close at $466.38. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 17.6% gain over the past four weeks.
The stock is expected to have gained after Argan was selected for inclusion in the S&P SmallCap 600 index. The inclusion leads to buying activity from index-tracking funds, increasing demand for the stock. This development is likely to have supported positive investor sentiment around Argan.
This builder of energy plants is expected to post quarterly earnings of $1.99 per share in its upcoming report, which represents a year-over-year change of -10.4%. Revenues are expected to be $254.95 million, up 9.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Argan, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AGX going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Argan belongs to the Zacks Building Products - Miscellaneous industry. Another stock from the same industry, Masco (MAS), closed the last trading session 0.9% higher at $64.24. Over the past month, MAS has returned -12.6%.
Masco's consensus EPS estimate for the upcoming report has changed +0.3% over the past month to $0.88. Compared to the company's year-ago EPS, this represents a change of +1.2%. Masco currently boasts a Zacks Rank of #3 (Hold).
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SeeArgan, Inc. (AGX) : Free Stock Analysis Report
Masco Corporation (MAS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
