Hedge Funds Are Dumping Herman Miller, Inc. (MLHR)

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Herman Miller, Inc. (NASDAQ:MLHR) .

Is Herman Miller, Inc. (NASDAQ:MLHR) a healthy stock for your portfolio? Money managers are reducing their bets on the stock. The number of long hedge fund positions that are disclosed in regulatory 13F filings went down by 4 recently. MLHR was in 16 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with MLHR holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as John Bean Technologies Corporation (NYSE:JBT), RealPage, Inc. (NASDAQ:RP), and Wright Medical Group Inc (NASDAQ:WMGI) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

What have hedge funds been doing with Herman Miller, Inc. (NASDAQ:MLHR)?

At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 20% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in MLHR at the beginning of this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Cliff Asness’ AQR Capital Management has the number one position in Herman Miller, Inc. (NASDAQ:MLHR), worth close to $47.9 million. The second largest stake is held by Royce & Associates, led by Chuck Royce, holding a $35 million position. Some other peers with similar optimism consist of Tom Russo’s Gardner Russo & Gardner, Joel Greenblatt’s Gotham Asset Management and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Judging by the fact that Herman Miller, Inc. (NASDAQ:MLHR) has witnessed falling interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedge funds who were dropping their full holdings last quarter. Intriguingly, Israel Englander’s Millennium Management dumped the biggest position of all the investors studied by Insider Monkey, comprising about $7.1 million in stock. D. E. Shaw’s fund, D E Shaw, also cut its stock, about $2.2 million worth.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Herman Miller, Inc. (NASDAQ:MLHR) but similarly valued. We will take a look at John Bean Technologies Corporation (NYSE:JBT), RealPage, Inc. (NASDAQ:RP), Wright Medical Group Inc (NASDAQ:WMGI), and Exelixis, Inc. (NASDAQ:EXEL). This group of stocks’ market caps are similar to MLHR’s market cap.

As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $376 million. That figure was $104 million in MLHR’s case. Exelixis, Inc. (NASDAQ:EXEL) is the most popular stock in this table. On the other hand John Bean Technologies Corporation (NYSE:JBT) is the least popular one with only 15 bullish hedge fund positions. Herman Miller, Inc. (NASDAQ:MLHR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard EXEL might be a better candidate to consider taking a long position in.

Disclosure: None