Lori Mingus, a director at MGP Ingredients Inc. (NASDAQ:MGPI), recently sold 7,050 shares of the company's common stock. The shares were sold at an average price of $46.03, totaling approximately $324,511. Following this transaction, Mingus holds 37,373 shares indirectly through a trust. Additionally, there are 419 shares held indirectly by her husband. These transactions were disclosed in a filing with the Securities and Exchange Commission.
"In other recent news, MGP Ingredients reported mixed financial results in its Third Quarter 2024 earnings call. Despite a 24% decrease in consolidated sales to $161.5 million, primarily due to a downturn in the American whiskey market, the company saw a robust increase in net income of 82% to $23.9 million. TD Cowen has downgraded the stock from Buy to Hold, lowering the price target to $50 from $66, citing persistent supply and demand imbalances for distilled spirits and significant margin resets for Distilling Solutions. MGP Ingredients is also facing challenges with a strategic shift towards Branded Spirits, a move met with skepticism by analysts.
In a bid for long-term growth, MGP Ingredients has initiated strategic measures including reducing whiskey production, exploring international expansion, and focusing on new distillate contracts. The company's acquisition of Luxco is a part of this strategic move towards becoming a premier branded spirits company. However, the company anticipates a nearly 35% decline in Distilling Solutions segment sales and a 50% drop in gross profits for 2025. Despite these challenges, MGP Ingredients expects the Ingredient Solutions segment to stabilize and grow, while the Branded Spirits segment aims for top-line growth and margin expansion. These are the recent developments in MGP Ingredients' journey to navigate the current market obstacles."
InvestingPro Insights
The recent insider sale by Lori Mingus at MGP Ingredients Inc. (NASDAQ:MGPI) comes at a time when the company's stock is facing significant headwinds. According to InvestingPro data, MGPI's stock has experienced a substantial decline, with a 6-month price total return of -41.56% and a year-to-date return of -52.36%. This downward trend is further emphasized by the stock trading at just 45.89% of its 52-week high.
Despite these challenges, MGPI maintains a relatively low P/E ratio of 9.74, suggesting the stock might be undervalued. This is supported by an InvestingPro Tip indicating that the company is "trading at a low earnings multiple." Additionally, MGPI's profitability remains intact, with the company reporting a gross profit margin of 40.26% for the last twelve months as of Q3 2024.
It's worth noting that while the stock has faced recent pressures, InvestingPro Tips highlight that MGPI's "cash flows can sufficiently cover interest payments" and "liquid assets exceed short term obligations," pointing to a stable financial position. These factors may provide some reassurance to investors amidst the current market volatility.
For those seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for MGPI, which could provide valuable insights into the company's future prospects and current market position.
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