The Money Man Behind Rick Santorum: Who Is Foster S. Friess?
Savings Experiment: Snow Removal
How hungry are you? The world is becoming hungrier all the time and Archer-Daniels-Midland (ADM) seeks to fill that need.
It is one of the world's largest processors of oilseeds, corn, and wheat. It turns corn into syrups, sweeteners, citric and lactic acids, and ethanol to fill your tank too. ADM also produces wheat flour for bakeries and pasta makers; cocoa and chocolate products for confectioners; animal-feed ingredients for farmers, and malt for brewers. It operates one of the world's largest crop origination and transportation networks, through which it connects crops and their markets across the globe.
While it does all this it also provides investors a 1.83% yield and very healthy19.50% ROE.
As the developing world improves its standard of living it also consumes more food. The numbers I see for ADM indicate they can produce and distribute efficiently -- their products and investor rewards as well. The price-to-earnings of 7.35 and price-to-book of 1.32 are less than half the market average. The price-to-cash flow of 10.71 is fair but the very important price-to-sales of 0.27 is a very very low bargain basement level.
You have to eat, but you don't have to invest. However, you are better off in either case staying with the lean.
Archer-Daniels-Midland ended the trading day, December 28, 2009 at $31.63.
For the other nine picks see: Chasing Value: 10 Stock Picks for 2010
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares of ADM.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
Reader Comments (Page 1 of 1)
12-30-2009 @ 7:26PM
william lindblad said...
I agree and so would Norman Borlaug. Most of the ag. sector suppliers should continue to fair well with the possible exception of those heavily in g.e. (that is g.e. for genetic engineering). Main reason, people simply don't trust it.