Miller Industries, Inc. (NYSE:MLR) was in 5 hedge funds’ portfolio at the end of December. MLR shareholders have witnessed a decrease in activity from the world’s largest hedge funds in recent months. There were 5 hedge funds in our database with MLR positions at the end of the previous quarter.
If you’d ask most stock holders, hedge funds are assumed to be slow, outdated investment vehicles of the past. While there are over 8000 funds with their doors open at present, we look at the bigwigs of this group, about 450 funds. It is estimated that this group controls the lion’s share of the smart money’s total asset base, and by keeping an eye on their top equity investments, we have revealed a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as key, bullish insider trading activity is a second way to break down the world of equities. There are plenty of stimuli for an insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this method if investors know where to look (learn more here).
With all of this in mind, it’s important to take a peek at the recent action regarding Miller Industries, Inc. (NYSE:MLR).
How have hedgies been trading Miller Industries, Inc. (NYSE:MLR)?
Heading into 2013, a total of 5 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Miller Industries, Inc. (NYSE:MLR). Royce & Associates has a $5.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Whitney Tilson of T2 Partners, with a $1.1 million position; 0.9% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Cliff Asness’s AQR Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Because Miller Industries, Inc. (NYSE:MLR) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedgies that decided to sell off their entire stakes at the end of the year. Intriguingly, Andy Redleaf’s Whitebox Advisors said goodbye to the biggest investment of all the hedgies we watch, comprising about $0.7 million in stock. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Miller Industries, Inc. (NYSE:MLR)?
Bullish insider trading is most useful when the company in focus has seen transactions within the past half-year. Over the last half-year time period, Miller Industries, Inc. (NYSE:MLR) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Miller Industries, Inc. (NYSE:MLR). These stocks are Fuel Systems Solutions, Inc. (NASDAQ:FSYS), Douglas Dynamics Inc (NYSE:PLOW), China Automotive Systems, Inc. (NASDAQ:CAAS), Stoneridge, Inc. (NYSE:SRI), and Shiloh Industries, Inc. (NASDAQ:SHLO). This group of stocks belong to the auto parts industry and their market caps resemble MLR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Fuel Systems Solutions, Inc. (NASDAQ:FSYS) | 4 | 1 | 0 |
| Douglas Dynamics Inc (NYSE:PLOW) | 6 | 0 | 5 |
| China Automotive Systems, Inc. (NASDAQ:CAAS) | 2 | 0 | 0 |
| Stoneridge, Inc. (NYSE:SRI) | 8 | 2 | 0 |
| Shiloh Industries, Inc. (NASDAQ:SHLO) | 0 | 0 | 0 |
With the returns exhibited by our strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Miller Industries, Inc. (NYSE:MLR) applies perfectly to this mantra.
