Jabran Kundi
3 min read
In This Article:
We recently published a list of 20 Underperforming Stocks Targeted By Short Sellers. In this article, we are going to take a look at where MGP Ingredients, Inc. (NASDAQ:MGPI) stands against other underperforming stocks targeted by short sellers.
Short interest refers to the percentage of publicly available shares that have been sold short. It is an indicator used by many investors to determine how strong a company’s bear thesis may be. Due to the nature of short selling, the short interest has become a popular indicator among investors.
The reason it is given so much weightage is that people betting against a stock have usually done solid research and are confident of a company’s downfall. They take unlimited risk, so when big investors or the smart money shorts a stock, people take notice. They try to unearth the red flags that may have prompted the high short interest.
We decided to dig deeper and try to find out where smart money sees trouble ahead. To come up with our list of 20 underperforming stocks targeted by short sellers, we looked at the worst-performing stocks of the last six months and then ranked them by the short interest.
A close-up of an iconic bottle of branded spirit produced by the distillery.
Short interest: 14.59%
6 months’ performance: -50.26%
MGP Ingredients, Inc. (NASDAQ:MGPI) operates as a supplier and producer of branded spirits, distilled spirits, and food ingredients. The company generates its revenue through Ingredient Solutions, Distillery Solutions, and Branded Spirits segments.
The US spirits industry has gone through challenges in 2024. According to The Distilled Spirits Council of the United States, increased spending on essentials like healthcare and housing, and poor sales performance of super premium liquors, drove the decline.
The company experienced headwinds last year with a 16% revenue decline. However, MGP Ingredients, Inc. (NASDAQ:MGPI) managed to slightly enhance its gross margins to 41% from 39.6%. Based on the guidance, 2025 seems to be another challenging year with an expected revenue decline of approximately 20%!
Although the firm is less vulnerable to tariff impacts due to its limited exposure to international sales, the little possible impact cannot be neglected when the company is already struggling. Shifting consumer preferences mainly among youngsters also pose long-term challenges for the overall industry.
Overall, MGPI ranks 17th on our list of underperforming stocks targeted by short sellers. While we acknowledge the potential of MGPI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MGPI but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
