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How Argan, Inc. (AGX) Stacks Up Against Its Peers

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Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.

Argan, Inc. (NYSE:AGX) was in 17 hedge funds’ portfolios at the end of September. AGX shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. There were 13 hedge funds in our database with AGX positions at the end of the previous quarter. At the end of this article we will also compare AGX to other stocks including FelCor Lodging Trust Incorporated (NYSE:FCH), Cavco Industries, Inc. (NASDAQ:CVCO), and Eros International plc (NYSE:EROS) to get a better sense of its popularity.

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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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What does the smart money think about Argan, Inc. (NYSE:AGX)?

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 31% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards AGX over the last 5 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

HedgeFundSentimentChart

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the number one position in Argan, Inc. (NYSE:AGX). Renaissance Technologies has a $55.3 million position in the stock. The second most bullish fund manager is Huber Capital Management, led by Joe Huber, which holds a $11.2 million position. Some other peers that hold long positions contain Joel Greenblatt’s Gotham Asset Management, and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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