Meanwhile, it looks like many investor Gurus are unloading aggregates and basic materials companies MLM and VMC for now. Gurus Ray Dalio and John Griffin sold out their MLM shares in December 2012, and Steven Cohen reduced his MLM by 96.44%. In the last quarter of 2012, investor Gurus Bruce Kovner, Jim Simons and Tom Russo sold out their stakes in VMC. Currently, Steven Cohen has only 8,744 shares of his VMC stake after his reductions in third quarter 2012. Here’s an in-depth analysis of Vulcan Materials Company.
A recent GuruFocus checkup on MLM shows that Martin Marietta Materials revenue has been in decline by 8.7% for the last five years, and the gross margin has been in long-term decline with the average rate of decline per year at 7.4%. The company’s operating margin has been in a five-year decline with an average rate of decline per year at 13.8%. Cash flow from operations shows a severe divergence from the reported net income, which may suggest that the company is not receiving payment from its customers or it has other activities affecting its cash flow.
The GuruFocus checkup also found three medium warning signs: The MLM stock dividend yield (1.53%) is close to three-year low of 1.53%. The MLM price ($104.88) is close to 3-year high of $104.88, and the MLM P/S ratio (2.3663) is close to five-year high of 2.59. See MLM history here.
Martin Marietta Materials, Inc. was formed in 1993 as a North Carolina corporation to serve as successor to the materials group that is now Lockheed Martin Corporation. The MLM company is a producer of aggregates for the construction industry, including infrastructure, commercial, agricultural and residential. Martin Marietta Materials also has a Specialty Products segment that manufactures and markets magnesia-based chemical products used in industrial, agricultural and environmental applications. MLM also sells dolomitic lime mainly to customers in the steel industry. The company operates in four reportable business segments: the Mideast Group, Southeast Group, and West Group, and collectively the Aggregates business and the Specialty Products segment. Mason Hawkins’ holding history of MLM looks like this:
As of Feb. 29, 2012, Martin Marietta Materials owns, has the right to use or has pending applications for approximately 98 patents pending or granted, and approximately 107 trademarks related to business.
Here is a summary of trading activity at Southeastern Asset Management:
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