Argan is Monday's pick for IBD 50 Growth Stocks To Watch as the energy service provider is in cup base and nearing a buy point. The company provides power and engineering services to data centers and the construction and telecommunications industries.
The IBD 50 stock pulled back around 3% Monday, but has been climbing back near its all-time high reached in late November. Argan stock gained an impressive 193% in 2024 in a spectacular climb, which included several bounces off its 10-week moving average.
Demand for energy is expected to remain strong as artificial intelligence focused data centers need upgrades to accommodate the large amounts of power required for AI computations.
The energy stock ranks No. 1 out of 22 stocks in the building-heavy construction group, which holds the No. 15 spot out of the 197 industry groups tracked by Investor's Business Daily. Its IBD Group Relative Strength Rating is a stellar A+.
The stock was featured as an IBD New America column in December, and highlighted on the company's website.
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Argan Stock Back Near A High
Argan stock is in a newly formed cup base with a 165.33 buy point, according to MarketSurge pattern recognition. But watch for a potential handle to form with a 160.44 entry.
Shares hit an all-time high on Nov. 27, but reversed lower on the day, which started the new base.
The energy stock climbed 7% last week in heavy volume and is back above its 10-week line, after sinking below it in the cup base. Its relative strength line reached a 52-week high as shown by the blue dot on the weekly chart. The stock has climbed around 14% so far this year vs. a 1% drop in the S&P 500 benchmark index.
Its Accumulation/Distribution Rating of B indicates moderate institutional buying over the last 13 weeks. Lastly, its Timeliness Rating of A shows potential relative price performance over the next 12 months.
Data Centers Power Provider Scores High Marks
Argan reported better-than-expected earnings and revenue for its fiscal third quarter on Dec. 5, with profits soaring 400%. Its sales growth has averaged around 56% over the last three quarters.
Its fiscal fourth-quarter profit estimates show a 29% increase, then a 55% lift in the fiscal first quarter before declining. And its revenue is projected to rise 20% in the first quarter followed by 11%, before dropping.
The energy stock holds a best-possible 99 Composite Rating, along with Earnings Per Share and Relative Strength Ratings of 98.
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