Archer Daniels Midland Company (NYSE:ADM)

Bio-fuel and reduced global sanctions

No matter what the market does, everyone must eat and ADM is about as high on agriculture as you can get.

I'm in at 35.30 not because of "bio-fuel" but because they are diversified enough to profit regardless.

Ethanol has taken a hit lately, but there are ways to make it more cost effectively. ADM also supplies food products. How can you lose?

Supermarket to the World. People eat.

Strong focus on R&D in alternative fuels.

low p.e

ADM's Fantastic Quarter: All About Diversity

ADM is a global commodity play. Not just ethanol or biodiesel like Verasun (VSE) and Pacific Ethanol (PEIX), not just sweeteners, not just food processing, they are all of the above. If corn prices crimp ethanol profits, they can move that into sweeteners and make money there. As wheat prices rise, ADM make money there. As more people require more food, ADM is there the provide the processing for it and profit from it.
The best part? ADM will increase it ethanol production 50% and double it biodiesel production in the next 18 months. The ethanol expansion alone will add 25% to earnings at today's depressed selling and record high corn prices. All this assumes no acquisitions of which ADM has been vocal about seeking out.

Trading at just 10 times this year's and 12 times next year's earnings ADM is THE company perfectly positioned to capitalize on the world predominate trends, commodities, biofuels and food.
ADM makes money from all three. Sooner or later folks will figure this out.

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.

ADM has a 5 year growth rate of 29.4% in earnings, with a projected 10% for the coming year. PE is 10.6, for a PEG of about 1.0. Ethanol for fuel (from corn, at least) doesn't make a lot of sense (the energy inputs may exceed the output), but much of the income growth has been coming from oilseed processing ($254M increase in oilseed processing profit from 05 to 06). This is not an exciting pick, but is attractively valued at current levels ($35).

ADM has not had the major increases as other parts of the market. At this time ADM has the largest control of elevators across the United States and Canada. These elevators are charging a record basis for the handling of grain.

ADM is also a major ethonal and corn sweetner manufacturer. This will increase over the future. All of this leads to higher value under the new management regime.

seeds.. and no mortgage exposure and I do not own this

This company has become synonymous with harvested Food. The kind of food that is healthy for you to eat and the ability to produce it en masse. If the economy takes a downturn and not the kind of chicken little countrywide CEO type of statement that the economy is failing just because his business is taking some of its just deserts, but the real downturn, supported by the lack of earnings and the inflation everyone says is not really happening until you go to the store, then this stock will be a safe haven for investors who believe that everyone must eat.

weak bullish symbol on MACD tight bollingar bands. The Stochastic Oscillator is registering a bullish signal as the %K line is above the %D. However, ADM is neither overbought nor oversold.

People keep talking about an ethanol "glut"... Wake up people! It's autumn!!! The harvest has come in and the plants are all making LOTS of ethanol...BUT! How much corn will be growing from October(now) until next August/September????!!?!? Glut! They've just begun shipping the stuff out!

undervalued and good growth potential

Anyone who thinks ethanol might be the wave of the future needs to do some basic research into the viability of this "alternative fuel". The bottom line is that ...

1) There is no fuel efficiency benefit over traditional gasoline.

2) The environmental footprint for making ethanol is larger than that of gasoline.

3) Is it renewable? Sure. So is the sun.

4 If we used all of our current cropland for corn production it would meet only 12% of our fuel needs.

5) It isn't even viable as a bridge fuel to fill the gap between gasoline and other far more efficient and clean alternative fuels.

6) It's great for Iowa. I have nothing against Iowa mind you. Iowa just happens to be an early primary state that any politician running for President has to win. How do you do that? Push corn subsidies and ethanol. Brilliant. If politicians are saying ethanol is great it must be true.

Ethanol is one of the greatest stories ever sold.

solid, safe, steady

Hurray for corporate welfare! When you can't make money legitimately, have the government give it to you for free!