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Herman Miller Inc. Message Board

  • atwood407 atwood407 Apr 15, 2003 12:57 AM Flag

    Sell Sell

    There is not one compelling reason or for that manner any reason to buy this stock. Inventory is through the roof even though they have cut back manufacturing significantly. They are still laying off. Please give me data to prove otherwise.

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    • I was speaking of the "fundamental" news more short term that often lags price moves (the classic buy on rumor, sell on fact). I would expect some bullish news for MLHR in the next 1-2 weeks which may or may not move the price up even further. All I know is the price is moving up strongly; has broken some major downtrend lines and is likely to move up further to around 20 before any significant pullback or decline.

      You are right of course re: Bullish Sentiment; it is high. However, just because sentiment is high does not mean all the buyers have bought, many just wish they would have. At the beginning of bull markets many don't believe it and fail to act as they have been killed in the previous bear market. There will indeed be pullbacks or even major declines but for now stocks are going up, including MLHR.

    • You mean like the "fundamental" news that lagged last year's bull market? And the one before that?

      Bullish sentiment is way up now and I hope you know what happens when it gets this high. This rally is sucking retail money in and they will be left holding the proverbal bag. This is the way WS works. Watch and learn. The sheep will be fleeced. It happens over and over.

    • I cannot give you any reasons to buy based on the fundamentals as I don't know anything about them. All I know is the price is going up, especially today, although volume is suspect as of mid-day. Rest assured that if the price continues to go up (as it should to at least 20), there will be some "fundamental" news to justify the already higher prices. Don't ask why...just buy (or stand aside) cause it's going up.

    • That's a really neat chair, planner, but if you're laying off people who's going to sit in it?

    • Remember, an order does not become a sale (and thus, revenue) until it ships out. Often times, companies place an order when they don't need to receive it for a couple of months. Increases in inventory can at times be a reflection of increased order rates that have not yet shipped. Given MLHR's application of supply chain technology, I doubt that they are buying widgets just for the sake of buying them.

      This is sometimes the danger of overly simplified quarterly snapshots. Unless you're on the inside and can see the whole picture (the week-over-week streaming video), you're just speculating. This goes both ways (long and short, positive and negative).

      Moral of the story, I don't read TOO much into two data points. If the quarterly inventory number continued to grow quarter over quarter, I may become concerned.

      Two cents submitted.

      -Dutch

    • What inventory are you referring to?

      As I understand it, everything that Herman Miller manufactures is product ordered by a customer and is shipped as soon as it is built. Herman Miller does not have warehouses full of products that they hope someone will buy.

      They also have a short lead time with their suppliers, so if orders are down, there is no build up of inventory.

      So again I ask, what inventory is through the roof?

      • 1 Reply to marcosboss
      • Exchange the word inventory for expenses/fixed costs. Sales are down and are trending down each quarter. Try to remember back to econ101. If Herman has a plant, and they make 1000 aeron chairs, there cost per chair is for example 500 bucks. If they now make 500 chairs in the same plant, there cost per chair is 750. They lose margin. They don't turn the manufacturing facilities into hotels when they aren't making aeron chairs. They sit there and don't generate any ROI. They are cutting costs to maintain an earnings per share. If a comapany isn't growing it's slowing suffocating. If companies are "tightening their belts" they aren't going to buy 1200/chairs. The secondary market for Aeron chairs is incredible. E-bay has them on there for 150-200 bucks. This company will continue to cut costs to maintain EPS but the stock isn't going to see any significant growth for a long time. So I ask you my friend, why buy this stock?

 
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