What Happened?
Shares of food and beverage supplier MGP Ingredients (NASDAQ: MGPI) jumped 3.2% in the morning session after the release of a favorable Consumer Price Index (CPI) report showed inflation cooling more than anticipated. The July report from the Bureau of Labor Statistics indicated a year-over-year inflation rate of 2.7%, just below the 2.8% economists had forecast. This suggests that price pressures on consumers may be easing. Particularly beneficial for the sector was the news that the food index remained flat, with grocery prices even declining by 0.1% month-over-month. This development is seen as a positive for the profitability of food, beverage, and personal care companies, as lower input costs and increased consumer purchasing power could boost sales. A Federal Reserve official's comments on the same day, noting that consumer spending fundamentals remain solid, further bolstered investor confidence in the sector's resilience.
After the initial pop the shares cooled down to $27.71, up 1.9% from previous close.
Is now the time to buy MGP Ingredients? Access our full analysis report here, it’s free.
What Is The Market Telling Us
MGP Ingredients’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock dropped 26.1% on the news that the company provided weak preliminary guidance ahead of its third-quarter earnings, with revenue and adjusted EBITDA falling below Wall Street's estimates. The weak results were driven by soft trends in the alcohol spirits category and elevated industry-wide whiskey inventories. Moving on, management expects these industry headwinds to persist at least through the rest of the year.
MGP Ingredients is down 29.3% since the beginning of the year, and at $27.71 per share, it is trading 69.8% below its 52-week high of $91.87 from August 2024. Investors who bought $1,000 worth of MGP Ingredients’s shares 5 years ago would now be looking at an investment worth $754.80.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
