What Makes Martin Marietta Materials (MLM) a Compelling Investment Opportunity?

Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” investor letter for the first quarter of 2025. A copy of the letter can be downloaded here. The first quarter of 2025 was mixed due to a flurry of activity from the new presidential administration. However, the strategy outperformed the Russell Midcap Index in Q1, returning -1.26% (net) vs -3.40% for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its first-quarter 2025 investor letter, Diamond Hill Mid Cap Strategy highlighted stocks such as Martin Marietta Materials, Inc. (NYSE:MLM). Martin Marietta Materials, Inc. (NYSE:MLM) is a company that manufactures natural resource-based building materials. The one-month return of Martin Marietta Materials, Inc. (NYSE:MLM) was 0.61%, and its shares lost 1.16% of their value over the last 52 weeks. On June 4, 2025, Martin Marietta Materials, Inc. (NYSE:MLM) stock closed at $549.66 per share with a market capitalization of $32.848 billion.

Diamond Hill Mid Cap Strategy stated the following regarding Martin Marietta Materials, Inc. (NYSE:MLM) in its Q1 2025 investor letter:

“As volatility picked up sharply in the quarter, we were active in the portfolio — and we anticipate that as volatility continues into Q2, we will likewise attempt to capitalize on compelling opportunities to reposition the portfolio for the period ahead. We initiated four new positions in Q1: Martin Marietta Materials, Inc. (NYSE:MLM), Ventas, Illumina and TransUnion.

Martin Marietta Materials is a heavy building materials supplier and the second-largest aggregates producer and distributor in the US with competitively positioned cement, ready-mix, asphalt and magnesia specialty businesses. The company has a long-term mindset, which proved effective during the last recession. Generally, the company tries to be the price leader in its markets and has historically successfully passed inflationary prices along to its clients. Given its strategic positioning in markets with strong growth potential and in states with approved multi-year Department of Transportation plans, we believe it is well-positioned for the period ahead. Recent macroeconomic uncertainty has pressured shares, introducing a compelling opportunity for us to invest in a quality aggregates company at a good entry point.”

Martin Marietta Materials, Inc. (NYSE:MLM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held Martin Marietta Materials, Inc. (NYSE:MLM) at the end of the first quarter, which was 72 in the previous quarter. While we acknowledge the potential of Martin Marietta Materials, Inc. (NYSE:MLM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Martin Marietta Materials, Inc. (NYSE:MLM) and shared the list of best materials stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.