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Opinions David Fingold
Martin Marietta MaterialsMLMDON'T BUYAug 31, 2020
A strong company with strong reserve life of aggregates in their quarries. But it's not a timely stock. There's confusion about why the home building industry is busy, but not the home aggregates. To explain, when people are building homes, the infrastructure for those homes are already complete. For an aggregate company to benefit, they need to get involved when say a former industrial or agricultural land to convert it into a subdivision when they build roads and other infrastructure--that's when the aggregates do well. Then, there's infrastructure; governments with lower tax revenues can't afford to spend on infrastructure like building roads now. Also with oil and gas in a slump, there's another source of demand gone.
$203.64
Stock price when the opinion was issued
$577.33
As of Jun 12, 2026. Market Open.
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Making an all-time high today and defying the manufacturing recession. Full-year revenue is up 10%. They benefit from where they operate--Texas, Colorado, Florida--where residential and infrastructure building are hot.
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Infrastructure Bill of late 2021 money is only trickling out now
Shares fell in 2022 by 23% due to recession fears, but is up 30% this year because they money is finally coming. The CEO sees 3-4 years of business. Trades at 24x forward PE, but expects that to decline because they keep beating their quarters.
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There's a bit of a supply crunch in the US. More people will need places to live, especially with immigration from areas of the world in such turmoil.
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Inflation-protection trades: energy (and materials). Both cyclical sectors are positively correlated to inflation. She also likes Martin Marietta given its heavy business in residential and non-res construction and a tailwind from Dems and Republicans to fix bridges and ports during supply-chain issues. Financials: JPM she likes, though they had a disappointing recent earnings, they do have a multi-faceted business. For more cyclicals, consider EM, namely IEMG.
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TOP PICK
Think crushed stone, concrete, etc being supplied to the construction industry. They are #1 or #2 in the aggregate supplier space. The industry is favored going forward and there are barriers to entry. This gives the company strong pricing power. Infrastructure spending should provide great tail winds and the company does well to extract value from acquisitions. Yield 0.59% (Analysts’ price target is $435.86)
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BUY
Who will benefit from the $1 trillion infrastructure bill? There's a decade, not a month, of spending here, so there will be long-term gains for certain stocks. Technical analyst Bob Lang suggests: He loves them. They will directly benefit from spending on roads and bridges. Their chart shows higher highs and higher lows. Lang targets $500.
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The boom and bust cyclicals have plenty of room to run. MLM is the leading supplier of building materials like aggregate cement, concrete and asphalt. Their results earlier this month beat the street, and shares roared, but have recently come off. It's now a bargain. Today they announced today they'll buy Lehigh Hanson's western business https://finance.yahoo.com/finance/news/martin-marietta-mlm-buy-lehigh-140502925.html), suggesting management is confident about the industry.
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It is into earth. If you own the gravel pits then you dominate that market. It is expensive to transport aggregates very far. A lot of private gravel pits are thinking of selling due to US tax changes and so MLM-N is in a good position to grow. (Analysts’ price target is $348.36)
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