Investment management company Vulcan Value Partners recently released its first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The firm focuses on improving long-term returns and lowering risk, rather than short-term results. In the quarter, the Large Cap Composite (Net) returned -14.1%, the Small Cap Composite (Net) returned -6.8%, the Focus Composite (Net) returned -19.1%, the Focus Plus Composite (Net) returned -19.1% as well as the All-Cap Composite (Net) returned -13.5%. Throughout 2025 and escalating to the first quarter of 2026, the market is experiencing heightened volatility related to AI’s potential, leading to mispricing of some strong companies. The current market turbulence presents opportunities for long-term investors willing to accept short-term volatility in stable-valued companies and improve the margin of safety. The letter identified businesses into three groups with perceived /real AI disruption risk: Software, Alternative Asset Managers, and indirectly impacted businesses. The firm highlights that its investment strategy aims to leverage this volatility to reduce risk and increase returns in the long term. In addition, please check the Firm’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Vulcan Value Partners highlighted stocks like MillerKnoll, Inc. (NASDAQ:MLKN). Headquartered in Zeeland, Michigan, MillerKnoll, Inc. (NASDAQ:MLKN) is a global furniture designer and manufacturer. On April 22, 2026, MillerKnoll, Inc. (NASDAQ:MLKN) closed at $17.40 per share. One-month return of MillerKnoll, Inc. (NASDAQ:MLKN) was 15.77%, and its shares gained 6.03% over the past 52 weeks. MillerKnoll, Inc. (NASDAQ:MLKN) has a market capitalization of $1.19 billion.
Vulcan Value Partners stated the following regarding MillerKnoll, Inc. (NASDAQ:MLKN) in its Q1 2026 investor letter:
“There were four material detractors to performance: Ryan Specialty Holdings, Inc., Ibstock Plc., MillerKnoll, Inc. (NASDAQ:MLKN), and Premium Brands Holdings Corporation. MillerKnoll is a global leader in providing premium grade commercial and residential furnishings. MillerKnoll’s results are being negatively impacted by the Iran War. Despite this short-term dynamic, the company’s fundamentals remain strong. Order trends continue to be healthy, gross margins continue to expand, and the company continues to generate strong free cash flow. We believe that MillerKnoll’s premium brands, multi-channel distribution model, and global reach reinforce the value stability of the company. We also believe that depressed volume trends in both its commercial and residential end markets are holding back the company’s normal earnings power, which is materially higher than today’s earnings. In the meantime, we own an iconic company supported by a strong balance sheet and a tenured management team with a substantial margin of safety.”
MillerKnoll, Inc. (NASDAQ:MLKN) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 21 hedge fund portfolios held MillerKnoll, Inc. (NASDAQ:MLKN) at the end of the fourth quarter, up from 17 in the previous quarter. In the third quarter of fiscal 2026, MillerKnoll, Inc. (NASDAQ:MLKN) generated consolidated net sales of $927 million, representing a 5.8% year over year increase on a reported basis and 3.8% organically. While we acknowledge the risk and potential of MillerKnoll, Inc. (NASDAQ:MLKN) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MillerKnoll, Inc. (NASDAQ:MLKN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
