MLM Makes Move Higher After Major Acquisition

Tailwinds could come from a shift in sentiment amongst options traders and analysts

Assistant Editor
May 24, 2021 at 10:47 AM
facebook twitter linkedin


Martin Marietta Materials Inc (NYSE:MLM) is in the spotlight today, after news broke that the construction materials company is acquiring HeidelbergCement's U.S. affiliate Lehigh Hanson Inc's West Region business for $2.3 billion in cash. After the deal, Martin Marietta will attain 17 active quarries and two cement plants. At last check, MLM was up 1.2% to trade at $366.71. 

On the charts, Martin Marietta stock has been carving out a path of fresh record highs, with pullbacks captured by the 50-day moving average since May 2020. Most recently, however, the equity has faltered a bit after its May 10 all-time high of $383.71. Year-over-year, the security is up an impressive 104.4%. 

Despite the positive price action, there is still plenty of room for upgrades amongst the brokerage bunch. Of the 12 in coverage, eight carry a tepid "hold" rating on MLM. 

Meanwhile, the options pits have been much more bearish than usual. This is per Martin Marietta stock's 10-day put/call volume ratio of 2.05 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 84% of readings from the past year, showing puts being picked up at a faster-than-usual rate. 

That said, speculating on the security's next move with options could be a prudent play. The stock's Schaeffer's Volatility Index (SVI) of 26% stands higher than just 12% of all other readings in its annual range, implying that options players are pricing in low volatility expectations at the moment. 

Grab your FREE Eternal Contrarian report!


 




 
Special Offers from Schaeffer's Trading Partners