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Let's talk about the popular Martin Marietta Materials, Inc. (NYSE:MLM). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$620 at one point, and dropping to the lows of US$519. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Martin Marietta Materials' current trading price of US$533 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Martin Marietta Materials’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Martin Marietta Materials
What's The Opportunity In Martin Marietta Materials?
Great news for investors – Martin Marietta Materials is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $677.58, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Martin Marietta Materials’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Can we expect growth from Martin Marietta Materials?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Martin Marietta Materials, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? Although MLM is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to MLM, or whether diversifying into another stock may be a better move for your total risk and return.