Thursday, January 1, 2009

Stock Pick: Archer Daniels Midland Company (NYSE: ADM)

Archer Daniels Midland Company (NYSE: ADM) is a good mid to long term buy for me, a stock I continue to hold and invest in.

1/1/09 Price Per Share: $28.83

Company Description
Archer Daniels Midland Company is primarily a business to business provider. They are a leader in procuring, transporting, storing, processing, and merchandising agricultural commodities and products. They are a processor of oilseeds, corn, wheat, cocoa, and other feedstuffs, and is a manufacturer of soybean oil and protein meal, corn sweeteners, flour, biodiesel, ethanol, and other food and feed ingredients.

Trends and Recession
From renewable energy to vegetarian trends to soy milk to the box of cereal in your house, ADM is heavily involved in making sure companies can manufacture and deliver those products to your home by providing the essential ingredients or components.

While the price of commodities and other external factors will affect ADM -- the fact that it continues to diversify and find innovative ways to sell its products and services, plus have a steady cash flow, in my opinion, will not only help ADM survive this downturn but it will continue to solidify its market position.

ADM recently beat the consesus on their fiscal first quarter, coming in at 133% over market estimates. While that's noteworthy, the better story is their historical performance and their dividends. In 2004, they were paying roughly 7 cents a share. In 2008, they were paying 13 cents a share.

They are a solid buy for mid-term to long-term position.