Hedge Funds Are Piling Into Miller Industries, Inc. (MLR)

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Miller Industries, Inc. (NYSE:MLR).

Miller Industries, Inc. (NYSE:MLR) investors should pay attention to an increase in enthusiasm from smart money of late. Miller Industries, Inc. (NYSE:MLR) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 11. Our calculations also showed that MLR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to go over the recent hedge fund action surrounding Miller Industries, Inc. (NYSE:MLR).

Do Hedge Funds Think MLR Is A Good Stock To Buy Now?

At second quarter’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 43% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in MLR 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.

The largest stake in Miller Industries, Inc. (NYSE:MLR) was held by Royce & Associates, which reported holding $60.1 million worth of stock at the end of June. It was followed by Huber Capital Management with a $4.3 million position. Other investors bullish on the company included Renaissance Technologies, AQR Capital Management, and Winton Capital Management. In terms of the portfolio weights assigned to each position Huber Capital Management allocated the biggest weight to Miller Industries, Inc. (NYSE:MLR), around 1.09% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, setting aside 0.41 percent of its 13F equity portfolio to MLR.

Now, key money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, initiated the largest position in Miller Industries, Inc. (NYSE:MLR). Citadel Investment Group had $0.5 million invested in the company at the end of the quarter. Matthew Stadelman’s Diamond Hill Capital also made a $0.3 million investment in the stock during the quarter. The only other fund with a brand new MLR position is Israel Englander’s Millennium Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Miller Industries, Inc. (NYSE:MLR) but similarly valued. These stocks are Donegal Group Inc (NASDAQ:DGICA), Gritstone bio, Inc. (NASDAQ:GRTS), Geron Corporation (NASDAQ:GERN), MetroCity Bankshares, Inc. (NASDAQ:MCBS), Haynes International, Inc. (NASDAQ:HAYN), CalAmp Corp. (NASDAQ:CAMP), and PennantPark Investment Corp. (NASDAQ:PNNT). This group of stocks’ market caps resemble MLR’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.9 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $72 million in MLR’s case. Gritstone bio, Inc. (NASDAQ:GRTS) is the most popular stock in this table. On the other hand MetroCity Bankshares, Inc. (NASDAQ:MCBS) is the least popular one with only 4 bullish hedge fund positions. Miller Industries, Inc. (NYSE:MLR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MLR is 58.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately MLR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MLR were disappointed as the stock returned -8.6% since the end of June (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.