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.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this report or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.