14-07-2023, 07:44 AM
Martin Marietta Materials Inc (NYSE: MLM) has managed to grow its revenue at a faster pace than total construction spending over the past 17 years. This was via a combination of acquisitions and changes in the product mix.
MLM serves a low-growth cyclical construction sector. The growths and changes did not translate into positive trends for all the metrics that drove returns. ROE declined. Gross profitability also declined. Capital efficiency got worse.
A Greenwald "Asset Value vs. EPV" analysis indicates that this is not a "franchise”. This is not a growth stock. The appropriate valuation metric is EPV. On such a basis there is no margin of safety at the current price.
![[Image: MLM.png]](https://i.postimg.cc/d3FKdrfK/MLM.png)
For details go to Martin Marietta Materials: Revenue Growth Hides The Real Picture
MLM serves a low-growth cyclical construction sector. The growths and changes did not translate into positive trends for all the metrics that drove returns. ROE declined. Gross profitability also declined. Capital efficiency got worse.
A Greenwald "Asset Value vs. EPV" analysis indicates that this is not a "franchise”. This is not a growth stock. The appropriate valuation metric is EPV. On such a basis there is no margin of safety at the current price.
For details go to Martin Marietta Materials: Revenue Growth Hides The Real Picture