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Should You Buy Martin Marietta Materials, Inc. (NYSE:MLM)?

Martin Marietta Materials, Inc. (NYSE:MLM) was in 22 hedge funds’ portfolio at the end of the fourth quarter of 2012. MLM has seen an increase in hedge fund interest in recent months. There were 18 hedge funds in our database with MLM positions at the end of the previous quarter.

In the eyes of most investors, hedge funds are seen as slow, old investment vehicles of the past. While there are greater than 8000 funds in operation at present, we choose to focus on the aristocrats of this club, close to 450 funds. It is widely believed that this group controls most of the hedge fund industry’s total capital, and by watching their top stock picks, we have revealed a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Martin Marietta Materials, Inc. (NYSE:MLM)Equally as important, positive insider trading sentiment is a second way to break down the financial markets. Obviously, there are many reasons for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this tactic if piggybackers know where to look (learn more here).

With all of this in mind, let’s take a look at the latest action regarding Martin Marietta Materials, Inc. (NYSE:MLM).

Hedge fund activity in Martin Marietta Materials, Inc. (NYSE:MLM)

At year’s end, a total of 22 of the hedge funds we track held long positions in this stock, a change of 22% from the third quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully.

When looking at the hedgies we track, Mason Hawkins’s Southeastern Asset Management had the biggest position in Martin Marietta Materials, Inc. (NYSE:MLM), worth close to $550 million, accounting for 2.4% of its total 13F portfolio. Coming in second is Jean-Marie Eveillard of First Eagle Investment Management, with a $229 million position; 1.3% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include John H. Scully’s SPO Advisory Corp, Tom Russo’s Gardner Russo & Gardner and Wallace Weitz’s Wallace R. Weitz & Co..

With a general bullishness amongst the heavyweights, some big names have jumped into Martin Marietta Materials, Inc. (NYSE:MLM) headfirst. Highline Capital Management, managed by Jacob Doft, established the largest position in Martin Marietta Materials, Inc. (NYSE:MLM). Highline Capital Management had 27 million invested in the company at the end of the quarter. Charles Clough’s Clough Capital Partners also made a $22 million investment in the stock during the quarter. The following funds were also among the new MLM investors: John Fichthorn’s Dialectic Capital Management, SAC Subsidiary’s CR Intrinsic Investors, and Israel Englander’s Catapult Capital Management.

Insider trading activity in Martin Marietta Materials, Inc. (NYSE:MLM)

Insider buying is at its handiest when the primary stock in question has seen transactions within the past six months. Over the last half-year time frame, Martin Marietta Materials, Inc. (NYSE:MLM) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

With the returns shown by our strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Martin Marietta Materials, Inc. (NYSE:MLM) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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