Is Herman Miller, Inc. (MLHR) Going to Burn These Hedge Funds?

What’s a smart Herman Miller, Inc. (NASDAQ:MLHR) investor to do?

To the average investor, there are dozens of methods shareholders can use to monitor stocks. A pair of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can outclass the broader indices by a very impressive amount (see just how much).

Equally as crucial, bullish insider trading sentiment is a second way to analyze the financial markets. There are plenty of reasons for an executive to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this strategy if shareholders know where to look (learn more here).

Thus, let’s analyze the newest info surrounding Herman Miller, Inc. (NASDAQ:MLHR).

What does the smart money think about Herman Miller, Inc. (NASDAQ:MLHR)?

At the end of the second quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes significantly.

Out of the hedge funds we follow, Natixis Global Asset Management’s Harris Associates had the largest position in Herman Miller, Inc. (NASDAQ:MLHR), worth close to $54.4 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Pzena Investment Management, managed by Richard S. Pzena, which held a $23.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Matthew Lindenbaum’s Basswood Capital, Tom Russo’s Gardner Russo & Gardner and Joel Greenblatt’s Gotham Asset Management.

Because Herman Miller, Inc. (NASDAQ:MLHR) has faced dropping sentiment from the top-tier hedge fund industry, it’s easy to see that there were a few money managers who were dropping their full holdings last quarter. It’s worth mentioning that D. E. Shaw’s D E Shaw cut the biggest investment of the “upper crust” of funds we monitor, valued at close to $1.5 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also said goodbye to its stock, about $1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading Herman Miller, Inc. (NASDAQ:MLHR)?

Legal insider trading, particularly when it’s bullish, is best served when the company in focus has seen transactions within the past 180 days. Over the last six-month time period, Herman Miller, Inc. (NASDAQ:MLHR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Herman Miller, Inc. (NASDAQ:MLHR). These stocks are Knoll Inc (NYSE:KNL), Pitney Bowes Inc. (NYSE:PBI), VeriFone Systems Inc (NYSE:PAY), Steelcase Inc. (NYSE:SCS), and HNI Corp (NYSE:HNI). This group of stocks are the members of the business equipment industry and their market caps are similar to MLHR’s market cap.

Using the results explained by Insider Monkey’s tactics, regular investors should always watch hedge fund and insider trading sentiment, and Herman Miller, Inc. (NASDAQ:MLHR) shareholders fit into this picture quite nicely.

Discover how hedge fund piggybacking can benefit you