Top-level corporate insiders such as CEOs tend to have the most up-to-date information on their businesses. If they’re buying company stock, it’s often a sign that the outlook for the stock is attractive.
Here, we are going to highlight buying from a top-level insider at MillerKnoll Inc (MLKN:US). MillerKnoll is an American company that designs and produces office furniture and equipment as well as furnishings for the home. It’s traded on the Nasdaq Stock Exchange and currently has a market capitalization of $1.28 billion.
Insider buying at MillerKnoll Inc
Regulatory filings show that on October 3, the CEO/President of MillerKnoll, Andrea Owen, bought 60,606 MLKN shares at a price of $16.88 per share. This transaction cost the insider a little over $1 million and increased her holding by 150%.
This insider transaction is notable for a couple of reasons. Firstly, the trade is sizable in monetary terms. Secondly, it has increased her holding by 150%. This suggests that the CEO/President is very confident that the market is mispricing the stock. It’s worth noting that Ms. Owen has been at the company for six years which means she is likely to know the business well.
MillerKnoll shares have experienced weakness recently on the back of economic uncertainty. Over the last month, the company’s share price has fallen about 35%.
However, recent Q1 2023 results showed that the company remains in solid shape. At the end of Q1, the company had a robust backlog of just over $868 million. As for its liquidity, it had access to just over $400 million in cash and credit facilities at the end of the quarter.
Looking ahead, sales for Q2 are expected to be between $1.027 billion and $1.067 billion. The mid-point of this range implies a 5% organic revenue increase compared to Q2 last year.
Meanwhile, cost cutting is expected to lead to annualized expense reductions of $30 million to $35 million. The benefit from these actions will start to be seen from the third quarter onwards.
“We are seeing some degree of uncertainty today in the end markets that we serve. As the first quarter progressed, we began to experience economic softening in various regions in which we operate. Our first quarter financial results reflect how strong performance in different segments of our business helps to mitigate softness in others, and how our global reach and operations continue to provide opportunities for growth and some insulation from regional downturns,” said the company.
Having read through these reassuring results, we see the recent insider buying at MillerKnoll as a bullish development.