Should You Buy MGP Ingredients Inc (MGPI)?

Now, specific money managers have jumped into MGP Ingredients Inc (NASDAQ:MGPI) headfirst. Cardinal Capital, led by Amy Minella, established the most outsized position in MGP Ingredients Inc (NASDAQ:MGPI), followed by Dmitry Balyasny’s Balyasny Asset Management, which initiated a $2 million position during the quarter. The other funds with brand new MGPI positions are Ed Bosek’s BeaconLight Capital, Charles Paquelet’s Skylands Capital, and Ken Griffin’s Citadel Investment Group.

Let’s now take a look at hedge fund activity in other stocks similar to MGP Ingredients Inc (NASDAQ:MGPI). We will take a look at Echo Global Logistics, Inc. (NASDAQ:ECHO), CommerceHub Inc (NASDAQ:CHUBA), Heron Therapeutics Inc (NASDAQ:HRTX), and Rent-A-Center Inc (NASDAQ:RCII). This group of stocks’ market valuations are similar to MGPI’s market valuation.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $133 million. That figure was $53 million in MGPI’s case. CommerceHub Inc (NASDAQ:CHUBA) is the most popular stock in this table. On the other hand Echo Global Logistics, Inc. (NASDAQ:ECHO) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks MGP Ingredients Inc (NASDAQ:MGPI) is even less popular than ECHO. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None