The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Martin Marietta Materials, Inc. (NYSE:MLM).
Martin Marietta Materials, Inc. (NYSE:MLM) investors should be aware of a decrease in activity from the world’s largest hedge funds lately. Our calculations also showed that MLM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are tons of metrics stock traders have at their disposal to assess publicly traded companies. A duo of the most useful metrics are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite hedge fund managers can trounce the broader indices by a very impressive margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a gander at the recent hedge fund action surrounding Martin Marietta Materials, Inc. (NYSE:MLM).
What does smart money think about Martin Marietta Materials, Inc. (NYSE:MLM)?
At Q1’s end, a total of 44 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -15% from one quarter earlier. By comparison, 36 hedge funds held shares or bullish call options in MLM a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
More specifically, Select Equity Group was the largest shareholder of Martin Marietta Materials, Inc. (NYSE:MLM), with a stake worth $615.7 million reported as of the end of September. Trailing Select Equity Group was Gardner Russo & Gardner, which amassed a stake valued at $312.2 million. Alkeon Capital Management, Adage Capital Management, and Nitorum Capital 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 East Side Capital (RR Partners) allocated the biggest weight to Martin Marietta Materials, Inc. (NYSE:MLM), around 8.63% of its 13F portfolio. Lafitte Capital Management is also relatively very bullish on the stock, setting aside 6.5 percent of its 13F equity portfolio to MLM.
Due to the fact that Martin Marietta Materials, Inc. (NYSE:MLM) has witnessed a decline in interest from the entirety of the hedge funds we track, logic holds that there was a specific group of funds who sold off their entire stakes by the end of the third quarter. It’s worth mentioning that John Armitage’s Egerton Capital Limited sold off the largest investment of all the hedgies monitored by Insider Monkey, totaling about $347 million in stock. Daniel Lascano’s fund, Lomas Capital Management, also dropped its stock, about $78.6 million worth. These moves are important to note, as total hedge fund interest was cut by 8 funds by the end of the third quarter.
Let’s also examine 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 Mid America Apartment Communities Inc (NYSE:MAA), Xylem Inc (NYSE:XYL), Tyler Technologies, Inc. (NYSE:TYL), and Sun Communities Inc (NYSE:SUI). All of these stocks’ market caps match MLM’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.75 hedge funds with bullish positions and the average amount invested in these stocks was $350 million. That figure was $1437 million in MLM’s case. Tyler Technologies, Inc. (NYSE:TYL) is the most popular stock in this table. On the other hand Mid America Apartment Communities Inc (NYSE:MAA) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks Martin Marietta Materials, Inc. (NYSE:MLM) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd and still beat the market by 15.6 percentage points. Unfortunately MLM wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on MLM were disappointed as the stock returned -5% during the second quarter (through May 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.