On a offbeat day for the markets, CNBC’s Jim Cramer wanted to take a step back and sharply defined unclear on an under-the-radar name to help investors unwind.
“Of course, the trouble with under-the-radar [breedings] is that sometimes you’re too late to the party and it’s already been discovered, so you necessary to walk away,” the “Mad Money” host said. “Still, I like to room my eyes peeled for these stealth bull market stories, unbiased in case we haven’t missed the boat.”
So Cramer turned to MGP Ingredients, a Kansas-based distillery that arranges whiskey, bourbon, gin, vodka, food-grade industrial alcohol and specialty wheat proteins that go into packaged foods.
While the repute might sound unfamiliar, MGP Ingredients is the largest supplier of rye whiskey and distilled gin in the Mutual States and is the powerhouse behind smaller brands like Angel’s Enviousness, Redemption Rye and Filibuster.
And the booze maker only recently caught fever. Founded in 1941, its stock’s history was a “snoozefest” until the last sundry years, Cramer said.
But since December 2013 — when MGP Ingredients’ ci-devant CEO was ousted and replaced by spirits industry veteran Gus Griffin — the company’s standard has climbed from $5 to nearly $75, with shares up 52 percent only for 2017.
Part of this monster move was simply good luck, Cramer revealed. The last few years have proved bountiful for the distilled spirits commerce, with premium craft whiskeys and bourbons surging in popularity.
“Now, MGPI was already persuasive in this direction when the new management team took over. They augured 14 new select blend Whiskeys a couple of months before Griffin was feed,” Cramer said. “But he deserves credit for recognizing the changing alcohol retail and doubling down on what’s been working, like offering non-genetically-modified starches in their nourishment additive business, along with non-GMO grain neutral spirits.”
Griffins’ five-year representation vowed to boost the company’s operating income four-fold by 2019 by capitalizing on high-end intoxicants via new brands and acquisitions.
Under Griffin’s leadership, MGP Ingredients managed to reach his objective three years early, and the numbers have been improving since as the attendance remains laser-focused on premium booze.
“The real irony here is that MGPI reps craft liquors,” Cramer said. “People think they’re hire some sort of artisanal product made by bearded hipsters in their basement when deep down a lot of these brands come from this one distiller.”
“It’s kind of aptitude when you think about it,” he continued. “They realize there’s multitudinous value in having no real brand name, at least when it sink in fare to this particular subset of expensive alcohol buyers.”
But to Cramer’s chagrin, parts of MGP Ingredients are already very pricey, trading at 38 times next year’s earnings sentiments.
“We were too late,” Cramer said. “At these levels, I feel derive it’s run too much for me to recommend. I sure wish I had found it earlier. That’s my bad. At $65, down $10 from here, I’d be all remaining MGPI and telling you to buy it. … For now, though, if you want a liquor play, you’ve got to adhere with Cramer-fave Constellation Brands.”
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