ADM: When in doubt, go with those that have clout

Slowed by the global recession, ADM nevertheless has the size, experience and global footprint (240 processing plants in 60 countries) to best peers when the recovery starts. Further, global population growth bodes well in several key emerging markets. Oilseed performance will be the star performer, followed by agricultural services. Margins should stabilize by mid-FY2010. The FY2009/FY2010 EPS estimates for ADM are $3.32 to $2.37.

The risks? Technically, the bears will argue $30 represents a formidable, psychological hurdle, but with the global economy starting to heal, ADM's P/E of 9 looks way too low, and that will remove the $30 resistance, pronto.

Stock Analysis: Archer Daniels Midland is a moderate-risk stock. Consider buying a 25% position in ADM now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your ADM position in the first half of 2009. Sell/Stop Loss if you were to buy shares in this company: $17.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.