With shares of Archer Daniels Midland (NYSE:ADM) trading around $40, is ADM an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s Movement
Archer Daniels Midland manufactures and sells protein meal, vegetable oil, corn sweeteners, flour, biodiesel, ethanol, and other value-added food and feed ingredients; and processes oilseeds, corn, wheat, cocoa, and other agricultural commodities. The companys Oilseeds Processing segment originates, merchandises, crushes, and processes oilseeds, such as soybeans and soft seeds into vegetable oils and protein meals.Its Corn Processing segment converts corn into sweeteners, starches, and bio products. The companys Agricultural Services segment engages in buying, storing, cleaning, and transporting agricultural commodities, such as oilseeds, corn, wheat, milo, oats, rice, and barley; and reselling those commodities primarily as food and feed ingredients.
Archer Daniels Midland will likely have its bid for the Australian company GrainCorp (GRCLF.PK) blocked by Australian Prime Minister Tony Abbott. The West Australian reports that the bid is Abbott’s first big test as to whether Australia is really “open for business,” like he has claimed. Archer has made a $3.4 billion bid for GrainCorp but many are saying that Abbott will reject Archer’s bid or impose conditions that will make the deal unviable. Australia’s treasurer, Joe Hockey, has said that the rumors are incorrect, as he alone will be making a decision on the acquisition.