Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Martin Marietta Materials ( MLM) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Martin Marietta Materials as such a stock due to the following factors:

  • MLM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $156.1 million.
  • MLM has a PE ratio of 52.
  • MLM is currently in the upper 30% of its 1-year range.
  • MLM is in the upper 25% of its 20-day range.
  • MLM is in the upper 35% of its 5-day range.
  • MLM is currently trading above yesterday's high.
  • MLM has experienced a gap between today's open and yesterday's close of 1%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on MLM:

Martin Marietta Materials, Inc., together with its subsidiaries, supplies aggregates products and heavy building materials for the construction industry in the United States and internationally. The stock currently has a dividend yield of 0.9%. MLM has a PE ratio of 52. Currently there are 4 analysts that rate Martin Marietta Materials a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Martin Marietta Materials has been 856,500 shares per day over the past 30 days. Martin Marietta has a market cap of $11.3 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.46 and a short float of 7.9% with 5.83 days to cover. Shares are up 51.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Martin Marietta Materials as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 18.6%. Since the same quarter one year prior, revenues rose by 37.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, MLM's share price has jumped by 32.99%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MLM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $91.98 million or 44.27% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 30.93%.
  • MARTIN MARIETTA MATERIALS' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, MARTIN MARIETTA MATERIALS reported lower earnings of $2.53 versus $2.61 in the prior year. This year, the market expects an improvement in earnings ($5.14 versus $2.53).
  • Despite currently having a low debt-to-equity ratio of 0.38, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.49 is sturdy.

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