Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Martin Marietta Materials, Inc. (NYSE:MLM).
Martin Marietta Materials, Inc. (NYSE:MLM) was in 42 hedge funds’ portfolios at the end of September. The all time high for this statistic is 52. MLM has experienced an increase in hedge fund sentiment in recent months. There were 34 hedge funds in our database with MLM positions at the end of the second quarter. Our calculations also showed that MLM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a glance at the fresh hedge fund action surrounding Martin Marietta Materials, Inc. (NYSE:MLM).
Do Hedge Funds Think MLM Is A Good Stock To Buy Now?
At third quarter’s end, a total of 42 of the hedge funds tracked by Insider Monkey were long this stock, a change of 24% from the second quarter of 2021. On the other hand, there were a total of 38 hedge funds with a bullish position in MLM a year ago. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Select Equity Group held the most valuable stake in Martin Marietta Materials, Inc. (NYSE:MLM), which was worth $1177.3 million at the end of the third quarter. On the second spot was Gardner Russo & Gardner which amassed $407.4 million worth of shares. Alkeon Capital Management, Nitorum Capital, and Melvin Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Cartenna Capital allocated the biggest weight to Martin Marietta Materials, Inc. (NYSE:MLM), around 6.32% of its 13F portfolio. Select Equity Group is also relatively very bullish on the stock, designating 3.95 percent of its 13F equity portfolio to MLM.
As aggregate interest increased, key hedge funds have jumped into Martin Marietta Materials, Inc. (NYSE:MLM) headfirst. Melvin Capital Management, managed by Gabriel Plotkin, established the most valuable position in Martin Marietta Materials, Inc. (NYSE:MLM). Melvin Capital Management had $34.2 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made a $6.8 million investment in the stock during the quarter. The other funds with brand new MLM positions are Javier Velazquez’s Albar Capital, Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Martin Marietta Materials, Inc. (NYSE:MLM) but similarly valued. These stocks are Fox Corporation (NASDAQ:FOX), Edison International (NYSE:EIX), Fortis Inc. (NYSE:FTS), ICON Public Limited Company (NASDAQ:ICLR), POSCO (NYSE:PKX), CarMax Inc (NYSE:KMX), and Cerner Corporation (NASDAQ:CERN). All of these stocks’ market caps resemble MLM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FOX | 25 | 665945 | 0 |
| EIX | 25 | 1240177 | 7 |
| FTS | 5 | 171234 | -4 |
| ICLR | 35 | 1349183 | -4 |
| PKX | 11 | 140930 | -1 |
| KMX | 36 | 1544189 | -3 |
| CERN | 36 | 1279936 | -2 |
| Average | 24.7 | 913085 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.7 hedge funds with bullish positions and the average amount invested in these stocks was $913 million. That figure was $2154 million in MLM’s case. CarMax Inc (NYSE:KMX) is the most popular stock in this table. On the other hand Fortis Inc. (NYSE:FTS) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Martin Marietta Materials, Inc. (NYSE:MLM) is more popular among hedge funds. Our overall hedge fund sentiment score for MLM is 84.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on MLM as the stock returned 18.3% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Martin Marietta Materials Inc (NYSE:MLM)
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Disclosure: None. This article was originally published at Insider Monkey.
