Archer Daniels Midland Company (ADM)

Is ADM one of those opportunities of a lifetime at these price levels? Maybe, depending on what your investment objectives are. If you are looking for a 100% + return in the next six months, read no further. However, if you are interested in a company that is well situated to take advantage of short term and long term opportunities in the agricultural segment worldwide and turn those opportunities into substantial shareholder value, we might have an once in a lifetime opportunity to buy value at these levels. As a disclosure, I worked for ADM for five years in upper middle management. Before I went to work for them, I was just like about everyone else, I really did not understand what ADM was all about. Often I see them touted as either a buy or a sell because of their ethanol exposure. Although one of the original large scale ethanol producers in the world, ethanol is an inconsequential part of their business. What their primary business is trading, processing and transporting virtually every agricultural product including very high value by products extracted through their processing process. They are one of the world's largest producers of high fructose corn syrup, a major world wide supplier of lysine, on the front end of implementing new and sustainable technologies with a real life positive impact on the environment. They also are a 100% hedged, 100% of the time company in their trading activities. Although the reality with all hedged companies is that there is always some unhedged risk at any given time they are so large that this risk is inconsequential. What is very consequential to their bottom line is that they developed a trading platform that matches offsetting trades within their company and subsidiaries prior to executing those trades in outside markets. This matching process occurrs in literally seconds of an order execution. The end result is that it saves the company tens of millions of dollars each year in broker and transaction costs. That pure profit heads straight for the bottom line. At a current PE of less than 10, with the prospect for agricultural and its products more bullish than in memorable history, and demand for food expected to increase by 50% by 2030, ADM is positioned perfectly to take advantage of this opportunity and owning ADM and holding long term will allow its investors to participate in the agriculture bull market with a lean management team that has a history for more than 40 years of capitalizing on any market environment, but particularly the volatile, schiczophrenic markets that we have seen for the last year and should expect to see more of down the road.

FOOD not ethanol; the world needs food and the ag cos with real food, especially beans, will "feed the world"; prefer to the fertilizer and "machine" cos which are volatile and vulverable to drought conditions
SUSTAINABLE

Once the hype over ethanol subsides, so will ADM's stock price. You should all know that ethanol is not the answer to our energy problems.

I believe that the world will continue to need food for a very long time into the future. ADM is positioned well to always enjoy the benefits from increased consumer consumption. They rank #1 for EPS Growth and Revenue Growth in their segment. Go ADM!

The company is in the sweet spot of the government mandated move to ethanol. As a result, ADM registered more than doubled
fourth-quarter earnings, driven by an increase in demand for processed oilseeds and corn byproducts such as ethanol.

Fiscal-fourth quarter earnings were buoyed by sharply rising ethanol prices, and once again easily beat analyst estimates. Quarterly profit totaled $410.3 million, or 62 cents per share, compared with a profit of $195.5 million, or 30 cents per
share, during the same period last year. Analysts expected 53 cents per share.

Earnings momentum is in full force as evidenced by the last three quarters, in which the company has exceeded estimates by an average of about 18%. This year's earnings estimates have
increased 9.7% to $2.59 over the past three months, while next year's numbers have jumped 11.5% to $2.90 per share.

ADM procures, transports, stores, processes and merchandises agricultural commodities and products. Operations are classified into three reportable business segments: Oilseeds Processing, Corn Processing and Agricultural Services. They are involved in everything from breakfast cereal to fuel-grade ethanol. ADM is a stalwart of civilization-- Agriculture. Like most large-caps, buy on weakness, hold long-term and reinvest dividends.

This is an alternative energy play.
Bullish on Alternative Energy for the following reasons:
- Democrats are in the house.
- Expected upward pressure on Oil prices as a result of increases in global conflicts.

EARNINGS PER SHARE PERSISTENCE:
70, 0.76, 1.59 and 2.00

PS: 0.63

OK ROE: 16%

Low PEG - 0.48

Leader in biofuels. Recent drop in stock price makes this a safe stock to own with lots of future runway. If price drops below 30 this is then a short term bargain also. Strong management team that is sitting within a solidlong term growing space in the marketplace.

Another stock after my green-n-green heart (as in pro-environment + pro-profit). As a brand name 100+ year agricultural company, ADM seems like a safer alternative energy play for ethanols & biodiesels. A potentially good entry point here at $34, but it still may have some room to the downside, especially since its 1-year chart looks like it just went over a hill and is now on its way down. (Disc.: I don't own ADM because of potential further short-term downside. I'm going to keep watching, but long-term as an AE/social conscience stock with a dividend, I consider it a buy.)

A real company, selling cheaply at 0.55 times sales with a forward PE of 12, that's been excessively beaten down on the basis of a pullback in public sentiment on ethanol. This is a safe way to ride the biodiesel and ethanol markets, getting the benefit of government subsidies and wide price swings, while buttressed by a profitable and stable multi-national firm.

Most of us have focused on ADM's increasing production of fuel ethanol. Fuel ethanol production is ecologically unsound and socially irresponsible. That said, American consumers love it. They think that they are "going green" by using corn based fuel. I think that "green-ness" of ethanol fuel will drive stock prices over the short term. The realities of fuel ethanol, however, will eventually bite ADM.

But not hard. ADM is a highly diversified agricultural products corporation. They will be using ag products for their profits for many years. So they go back to making seed oil? It's what they do. It's been profitable for decades.

Expect them to continue to ride the ethanol boom up, then drop back to traditional levels after they've re-learned to stick to their core business.

Simply undervalued. Continues to show consistent improvement in ROIC, with incremental ROIC even higher. A core ethanol holding in my opinion, particularly should it focus on converting diversified inputs into ethanol as opposed to simply corn.

The demand for ethanol is increasing, and the need for alternate fuels has been witnessed throughout the country. I believe ADM is well-positioned to supply ethanol over the next year or two.

Good buzz good fundamentals recent uptrend = 3-5 months outperform. Oh, and they are also a good, solid, stable company, and they ARE going to profit from fuels in the future, because we ARE going to be running on either ethanol, biodiesel, or both. At the very least, ethanol's percentage in regular gasoline will rise (did you know that regular gasoline is 10% ethanol?). Either way, make no mistake, the public outcry for 'clean' fuels has been heard by the politicians, and if a 'biofuel' energy solution is economically unsound, the government will subsidize it. (Don't rely on social security)

ADM's been around for around 100 years and they've consistently delivered solid financial performance over the years. At a forward PE of around 14, they're undervalued, IMO. They're not sexy; they provide the basics we all need to survive on --corn, oils, grains of various types, etc. As long as the population is growing and people need foodstuffs, this company's going to be around. And, oh yes, did I mention they pay a nice little dividend for your trouble? Great long-term play, IMO, and they're off their yearly high (following the nutty pile-on for ethanol).

It is a major provider of ethenol

Archer Daniels Midland is a company I have followed closely since 1974. I once bought a very, very large position for an institution where I was an analyst at $13 1/8 - just slightly below the company's bookvalue at the time. The shares were sold around $39-$40 a few year later.

Near the company's 52-week trading range at $23 per share. It is time to buy ADM again in my Professional Opinion. ADM has an Intrinsic Value of approximately $68 to $72 per share.

ADM is a BUY at $23.00.

Kahuna,CFA

It is pretty clear that ethanol use and production is on the rise, and ADM is at the top of the heap when it comes to ethanol. It's possible that by the time cellulose ethanol is perfected by other companies, it will be too late.........as other alternative energies will have taken over both corn based ethanol and/or any other sources of ethanol.

World will always need more processed food, never less. They are one of the giants. If they're innovative they'll become an acquisition target, if they're not acquired they'll simply do well on their own. They are a household name (ads have run with the sunday morning political shows as long as I've been alive!). They are also significant players in alternative energy, which in the long-run will be profitable.