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Should Value Investors Buy Archer Daniels Midland (ADM) Stock?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Archer Daniels Midland (ADM) is a stock many investors are watching right now. ADM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 13.46 right now. For comparison, its industry sports an average P/E of 15.51. Over the past 52 weeks, ADM's Forward P/E has been as high as 116.19 and as low as 11.67, with a median of 14.13.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ADM has a P/S ratio of 0.51. This compares to its industry's average P/S of 1.17.

Value investors will likely look at more than just these metrics, but the above data helps show that Archer Daniels Midland is likely undervalued currently. And when considering the strength of its earnings outlook, ADM sticks out at as one of the market's strongest value stocks.


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Archer Daniels Midland Company (ADM): Free Stock Analysis Report
 
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