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Diversified Opportunities Report

MGP Ingredients, Inc.

Mar 16, 2023

Investment Type
Mid - Cap
Risk Level
Rec. Price ($)

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

MGP Ingredients, Inc. is a producer and supplier of distilled spirits, branded spirits, and food ingredients. The Company operates through three segments: Distillery Solutions, Branded Spirits, and Ingredient Solution


1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

As compared to the industry median, MGPI's profit margins in FY22 were noteworthy. In every operational area, MGPI has outperformed the industry average, exhibiting effective resource management and operational success. The supplemental graph demonstrates that MGPI increased its free cash flow creation from USD 40.87 million in FY21 to USD 43.61 million in FY22 despite difficult macroeconomic conditions, demonstrating the business has created value for its shareholders.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~81.46% of the total shareholding, signifying concentrated shareholding. Raymond James Financial Services Advisors, Inc., and Lux (Donn S.), are the biggest shareholders, holding the maximum stake in the company at ~17.90% and ~16.82%, respectively.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of FY22:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

  • The Stock has corrected by around 19.78% in the past three months, while similarly, the stock price has seen a correction of 19.58% in the past six months.
  • The stock is currently towards the lower side of its 52-week range of USD 125.74 and 52-week low price of USD 77.57. The stock reached its 52-week high after the announcement of the Q3FY22 data but has subsequently fallen by 26.10%. The stock has fallen below both its 200-day SMA and 50-day SMA, which had previously provided solid support for the price. However, following the decline, the price is now close to its next important support, which is now at around USD 90.00.
  • The price is currently trading below its long-term (200-day) SMA and its short-term (50-day) SMA, with the current RSI of 38.62.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings per share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 15, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.


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