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Herman Miller Inc. Message Board

  • Logicalthought Logicalthought Jun 20, 2003 8:09 PM Flag

    Why is this stock so expensive???

    It's selling at around 35x next year's earnings estimate. Meanwhile...

    1) Who's buying (or will be buying) expensive office furniture?

    2) Isn't there tons of used stuff available?

    3) Isn't it easy for China to knock this stuff off?

    4) Technically, the stock has rallied to-- and stalled out-- right under a major weekly downtrend line that started in August of 2000.

    4) They've got a decent-sized chunk of debt, which impacts on the enterprise value of the company.

    I actually shorted some of this today. Can anyone tell me why (with a rational argument) why I might have made a mistake?

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    • I don't think you made a mistake. I think you did the right thing. This stock is stuck in a 1999 time warp, and I believe it will end badly. The $649 to $519 thing may be a joke, but it really is not so funny. Didn't they sell Aeron chairs for $900? It's the way of the world, and I cannot see how MLHR will be making the profits to justify the current market capitalization.

    • all very sound judgements you made.

      Miller does have the Sit-On-It and OFS/First Office alliance to provide guaranteed distribution of mid-market brands to it's dealers. Herman Miller is definitely in a better position than Steelcase but can't hold a candle to Haworth these days.

      Neocon was down 30% by my guess, but I could be wrong. Alot of my friends didn't make it.

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