As I said last month, my Negative Enterprise Value screen was little changed m/m, so I refrained from refreshing the outputs. I’ve now transitioned to a Low Enterprise Value screen, which scored the following as the highest ranking outputs on 9/3:
- HCI Group ($HCI)
- Interactive Brokers ($IBKR)- bought 8/2
- Argan Inc ($AGX)- watch list, new to list
- FXCM ($FXCM)- bought 6/21
The only new name to highlight is Argan, a heavy construction, engineering, consulting, and maintanance firm for the power industry (electrical utilities and renewable energy) and telecommunications infrastructure. I am interested in building a position in AGX upon a pullback. I expect to start buying upon a pullback between the $18.25 first support (-3.1% to 23.6% Fibonacci level) and $17.4 second (-7.6%, 38.2% Fibonacci). Right now, AGX is contending with a Cup & Handle, which already met rim resistance at $19.5. The weekly chart is threatening 2x bear divergence, but you can see that indicators in the daily have begun reversing that threat, with a golden cross all but assured for next week. Its primary pattern is still a wide bull channel.
Fundamentally, AGX’s backlog was -24% q/q ($236M to 180M), so there’s pressure on their Gemma Power Systems (GPS) segment to win new, long term contracts (designing & building power plants), which is heavily dependent on the macroeconomic environment. They have a very liquid balance sheet (85% gross cash/price), but they may require an activist investor to encourage them to unlock shareholder value (buybacks/special dividend).
AGX is a uber-cyclical name that traffics in a lot of the industries synonymous with the secular American economic renaissance. I’ll disclose any upgrades or new positions on my trade reconciliation.
Here’s the performance-to-date of unrealized positions still open from prior screens; buys executed 4/30 & 6/10, as specified previously; data as of intraday 9/12: