Before we spend countless hours researching a company, we’d like to analyze what insiders, hedge funds and billionaire investors think of the stock first. We would like to do so because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Herman Miller, Inc. (NASDAQ:MLHR).
Herman Miller, Inc. (NASDAQ:MLHR) was in 22 hedge funds’ portfolios at the end of December. MLHR has seen an increase in hedge fund interest lately. There were 20 hedge funds in our database with MLHR holdings at the end of the previous quarter. Our calculations also showed that MLHR isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We’re going to review the key hedge fund action surrounding Herman Miller, Inc. (NASDAQ:MLHR).
Hedge fund activity in Herman Miller, Inc. (NASDAQ:MLHR)
At Q4’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from one quarter earlier. On the other hand, there were a total of 21 hedge funds with a bullish position in MLHR a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, AQR Capital Management was the largest shareholder of Herman Miller, Inc. (NASDAQ:MLHR), with a stake worth $24.7 million reported as of the end of December. Trailing AQR Capital Management was Royce & Associates, which amassed a stake valued at $24.1 million. Millennium Management, Renaissance Technologies, and Gardner Russo & Gardner were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Venator Capital Management, managed by Brandon Osten, created the largest position in Herman Miller, Inc. (NASDAQ:MLHR). Venator Capital Management had $1.2 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also initiated a $0.6 million position during the quarter. The other funds with brand new MLHR positions are Paul Tudor Jones’s Tudor Investment Corp, George Zweig, Shane Haas and Ravi Chander’s Signition LP, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now take a look at hedge fund activity in other stocks similar to Herman Miller, Inc. (NASDAQ:MLHR). We will take a look at Power Integrations Inc (NASDAQ:POWI), GreenSky, Inc. (NASDAQ:GSKY), Deluxe Corporation (NYSE:DLX), and Four Corners Property Trust, Inc. (NYSE:FCPT). This group of stocks’ market values are closest to MLHR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| POWI | 4 | 81545 | -5 |
| GSKY | 20 | 33315 | 0 |
| DLX | 24 | 99926 | 3 |
| FCPT | 13 | 97064 | 0 |
| Average | 15.25 | 77963 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $99 million in MLHR’s case. Deluxe Corporation (NYSE:DLX) is the most popular stock in this table. On the other hand Power Integrations Inc (NASDAQ:POWI) is the least popular one with only 4 bullish hedge fund positions. Herman Miller, Inc. (NASDAQ:MLHR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on MLHR, though not to the same extent, as the stock returned 24.1% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
