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  "documentTitle": "MGP Ingredients, Inc. (MGPI)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2017-01-12 00:00:00",
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      "text": "Spruce Point Believes Investors Should Be Cautioned Not To Extrapolate Recent Earnings Performance. We Believe There Are Numerous Business Risks And Cracks In The Growth Story That Are Not Being Adequately Discounted",
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      "text": "On the surface, the Company's transformation strategy appears wildly successful. Its EPS has risen from a loss of ($0.29) in 2013 to positive earnings of $1.50 per share in the LTM 9/30/16 period.",
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      "text": "The biggest aspect of the \"bull case\" surrounding MGPI is that it is a play on the explosive growth in consumer taste for whiskey and bourbon. Investors fail to realize that MGPI is primarily a white-label producer that sells to other brands.",
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      "text": "MGPI is a simple story to understand. It operates two businesses: an ingredients business run from Kansas and an alcohol distillery in Indiana. Both of these facilities are old assets and prone to substantial operational hazards.",
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      "text": "There are now over 1,000 craft distillers for whiskey / bourbon in the United States. Just like Diageo, many of these distillers are constructing their own distilleries, which would reduce / eliminate their need to buy from MGPI.",
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      "text": "Because investors are so enamored with MGPI's alcohol business, they are not paying attention to other material risks that loom large in 2017 such as: 1) key ingredient patent expiration, 2) collective bargaining agreement, 3) supplier agreements, and 4) added fines / penalties.",
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      "text": "MGPI's shares have appreciated 1,000% since 2014 as investors have cheered the Company's decision to hire new management, reprioritize its businesses away from commodity ingredients, and focus on \"higher margin\" premium alcohol beverages.",
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      "text": "MGP Ingredients (\"MGPI\" or \"the Company\") Is A Commodity Ingredient and Alcohol Producer Now Being Spun As A Sexy Transformation Story Into A Premium Producer of Branded Whiskey and Bourbon",
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      "text": "Spruce Point Believes Investors Should Be Cautioned Not To Extrapolate Recent Earnings Performance. We Believe There Are Numerous Business Risks And Cracks In The Growth Story That Are Not Being Adequately Discounted",
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      "text": "Spruce Point Believes MGPI Is A \"Strong Sell\" For The Following Reasons:",
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