MGP Ingredients Is Not Broken, It's Just Hungover
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Woodworth Contrarian Fund1 FollowerFollow5ShareSaveCommentsSummaryMGP Ingredients (MGPI) trades at 0.86x price-to-book (ex-goodwill), below net tangible asset value, despite a fortress balance sheet and positive cash flow.The market is pricing MGPI for permanent decline due to a cyclical brown goods inventory glut, but industry discipline and contract stability suggest recovery by 2026–2027.Three growth engines—Penelope Bourbon, El Mayor Tequila, and Ingredient Solutions—are accelerating, with premiumization trends and specialty ingredients offering significant upside.Two independent recovery paths exist: asset revaluation (P/B normalization) and EBITDA multiple expansion, each offering 50%+ upside with defined downside risk.Editor's note: Seeking Alpha is proud to welcome Woodworth Contrarian Fund as a new contributing analyst. You can become one too! Share your best investment idea by submitting your article for review to our editors. Get published, earn money, and unlock exclusive SA Premium access. This article was written byWoodworth Contrarian Fund1 FollowerFollowBrothers Drew Millegan and Quinn Millegan manage the Woodworth Contrarian Fund, a hedge fund based in McMinnville, Oregon. They grew up in the finance world, and specialize in contrarian investment strategies in the US Public and Private markets. Something missing from your portfolio may be a diversification into the Woodworth Contrarian Fund for accredited investors. Now is a great time to diversify your portfolio with an investment into a multi-award-winning fund. An exposure to a value-based contrarian strategy is a unique opportunity for your long term capital that you’re seeking aggressive returns for. With eight years of the Woodworth Fund under management, the Millegan Brothers are trained stock-pickers and experienced venture capital investors with a proven track record. Give us a call today to discuss a liquid investment with independent administration and independently audited monthly statements and a personal relationship.Check out The Millegan Memo Monthly Newsletter & the Capital Call Podcast with the Millegan Brothers for more.Analyst’s Disclosure:I/we have a beneficial long position in the shares of MGPI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.Disclosure: This analysis is for informational purposes. MGPI remains a cyclical business with near-term headwinds and execution risk. Position sizing and risk management are essential. Do your own due diligence. Please note that the Woodworth Contrarian Stock & Bond Fund, LP, of which the Millegan Brothers manage and are invested in, currently hold a position of MGPI as of the publication date of this article. They may or may not choose to modify their exposure to this name for any reason at any time. This is not a recommendation to buy or sell MGPI or any other name - investments incur significant risk, our risk tolerance may be significantly higher than the average investor, and any discussion in this article does not take into consideration your individual circumstances.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.