To many of your peers, hedge funds are assumed to be overrated, old financial tools of a forgotten age. Although there are over 8,000 hedge funds with their doors open in present day, Insider Monkey focuses on the elite of this group, around 525 funds. Analysts calculate that this group controls most of all hedge funds’ total capital, and by keeping an eye on their best investments, we’ve discovered a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 outperformed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Just as necessary, optimistic insider trading activity is a second way to look at the investments you’re interested in. Just as you’d expect, there are a number of stimuli for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this strategy if piggybackers know what to do (learn more here).
Thus, let’s examine the newest info surrounding Martin Marietta Materials, Inc. (NYSE:MLM).
How have hedgies been trading Martin Marietta Materials, Inc. (NYSE:MLM)?
At the end of the second quarter, a total of 23 of the hedge funds we track held long positions in this stock, a change of -8% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly.
Out of the hedge funds we follow, Matt McLennan’s First Eagle Investment Management had the biggest position in Martin Marietta Materials, Inc. (NYSE:MLM), worth close to $244 million, comprising 0.7% of its total 13F portfolio. The second largest stake is held by John H. Scully of SPO Advisory Corp, with a $182.4 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Tom Russo’s Gardner Russo & Gardner, Mason Hawkins’s Southeastern Asset Management and Donald Chiboucis’s Columbus Circle Investors.
Since Martin Marietta Materials, Inc. (NYSE:MLM) has faced bearish sentiment from the entirety of the hedge funds we track, we can see that there is a sect of fund managers who were dropping their positions entirely last quarter. Interestingly, SAC Subsidiary’s Sigma Capital Management said goodbye to the largest stake of the “upper crust” of funds we monitor, worth close to $33.7 million in call options.. Israel Englander’s fund, Millennium Management, also said goodbye to its call options., about $7.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds last quarter.
How are insiders trading Martin Marietta Materials, Inc. (NYSE:MLM)?
Insider buying is best served when the company in focus has experienced transactions within the past six months. Over the last 180-day time frame, Martin Marietta Materials, Inc. (NYSE:MLM) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Martin Marietta Materials, Inc. (NYSE:MLM). These stocks are USG Corporation (NYSE:USG), Masco Corporation (NYSE:MAS), Vulcan Materials Company (NYSE:VMC), Armstrong World Industries, Inc. (NYSE:AWI), and Owens Corning (NYSE:OC). This group of stocks are the members of the general building materials industry and their market caps match MLM’s market cap.