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Is Archer Daniels Midland (ADM) Stock Undervalued Right Now?

Zacks Equity Research
·2 min read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Archer Daniels Midland (ADM). ADM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 14.19, which compares to its industry's average of 14.74. Over the last 12 months, ADM's Forward P/E has been as high as 116.19 and as low as 11.67, with a median of 14.41.

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Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ADM has a P/S ratio of 0.52. This compares to its industry's average P/S of 1.04.

These are just a handful of the figures considered in Archer Daniels Midland's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ADM is an impressive value stock right now.

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

To read this article on Zacks.com click here.

Zacks Investment Research