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Martin Marietta Materials Shares Boosted By Insider Buying

On a down day for the stock market generally, shares of quarry miner Martin Marietta Materials, Inc (NYSE:MLM) fared better than most, rising 1.6%.

Part of the reason for this may owe to continued insider buying by the folks who know the company best — company insiders. Case in point: Insider Monkey’s database shows that on May 29, company director Stephen Zelnak made a direct purchase of 15,000 Martin Marietta shares at an average price of $150.16 per share.

According to information publicly available on Insider Monkey, this was the fourth such acquisition that Zelnak has made in just the past week. In addition to his most recent, Zelnak’s purchases have included:

-105 shares acquired in a non-open market transaction, also on May 29, at a time when the shares were selling for $149.21 per share;

-10,500 shares bought directly on May 27 at $151.40 per share;

– and 5,650 shares bought directly on May 26, at $150.35 per share.

That’s enough to lift Zelnak’s stake in the company to 52,649 shares in all — a $7.9 million stake in the company, and more than twice the shares he owned just one week ago.

What does it mean to you?
As a quick glance at the company’s Yahoo! Finance page will tell you, Martin Marietta shares currently fetch only $149.38 apiece on the open market, which appears to suggest that outside investors now have an opportunity to follow the insider’s lead — and pay a bargain price to do it.

A closer look at the data, however, suggests that you may want to think twice before treading where Mr. Zelnak has already trod. Priced today north of 51 times trailing earnings, pegged for only 11% long-term earnings growth by the analysts who follow it, and paying a below-market dividend yield of just 1.1%, Martin Marietta shares don’t look like any great bargain by ordinary financial metrics.

Then again, that does beg the question: If all Zelnak sees are the same numbers that the rest of us are seeing… then why is he buying? (Or does he perhaps see something more)?


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