Argan, Inc. (NYSEAMEX:AGX) investors should pay attention to a decrease in hedge fund interest in recent months.
In the 21st century investor’s toolkit, there are tons of indicators market participants can use to monitor the equity markets. A duo of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can outperform the broader indices by a significant amount (see just how much).
Just as beneficial, optimistic insider trading activity is a second way to parse down the investments you're interested in. Just as you'd expect, there are a number of incentives for an executive to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this method if investors know what to do (learn more here).
Now, let's take a gander at the key action surrounding Argan, Inc. (NYSEAMEX:AGX).
At Q1's end, a total of 4 of the hedge funds we track were long in this stock, a change of -43% from the first quarter.
Because Argan, Inc. (NYSEAMEX:AGX) has witnessed bearish sentiment from the entirety of the hedge funds we track, it's safe to say that there lies a certain "tier" of funds that elected to cut their full holdings at the end of the first quarter. At the top of the heap, Robert B. Gillam's McKinley Capital Management dropped the biggest position of the "upper crust" of funds we track, totaling close to $1 million in stock., and Neil Chriss of Hutchin Hill Capital was right behind this move, as the fund dropped about $0.9 million worth. These moves are important to note, as total hedge fund interest fell by 3 funds at the end of the first quarter.
Bullish insider trading is most useful when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day time frame, Argan, Inc. (NYSEAMEX:AGX) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's also take a look at hedge fund and insider activity in other stocks similar to Argan, Inc. (NYSEAMEX:AGX). These stocks are Layne Christensen Company (NASDAQ:LAYN), Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), Matrix Service Co (NASDAQ:MTRX), Orion Marine Group, Inc. (NYSE:ORN), and Sterling Construction Company, Inc. (NASDAQ:STRL). This group of stocks are the members of the heavy construction industry and their market caps are closest to AGX's market cap.