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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Archer-Daniels-Midland Company (XNYS:ADM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ADM
Name:
ARCHER-DANIELS-MIDLAND COMPANY (XNYS:ADM)
Sector:
- 1423000.00K
Industry:
Farm Products
CEO:
Mr. Juan Luciano
Total Employees:
41,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -1.37% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ARCHER-DANIELS-MIDLAND COMPANY(ADM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND FARM PRODUCTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
87.61
One Month Price Target:
$87.99
Six Month Price Target :
$89.89
Likely Price in One Year's Time:
Ticker:
$92.17
Likely Trading Range Today Under (Normal Volatility)
$87.42
Price Upper limit ($) :
$88.01
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$84.13
This week:
$79.83
This month :
$72.06
Other Primary facts
Market Cap:
48.06B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
560.56M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.27%
-10.07%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$103.72
$96.16
$71.50
$79.06
Medium risk (<10%) entry points
Buy Call
Sell Call
$93.70
Buy Put:
Sell Put:
$92.08
$81.50
$83.14
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ADM
Sharpe Ratio:
5.55%
Comparison:
ADM, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 203.60% higher than the industry
& ratio is 143.62% higher than the market/S&P 500 average
Average Returns/Yield of
ADM
Daily returns:
0.12%
Weekly returns:
0.60%
Monthly returns:
2.39%
Yearly returns:
10.81%
Comparison of returns:
Average annual returns/yield (last 3 years) is 165.00% above industry average
Classification:
ADM, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.9
Statistical test of Returns:
ADM has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.99%
Weekly Volatility:
4.45%
Monthly Volatility:
8.90%
Yearly Volatility:
30.84%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.79%
Volatility in last five trading days has been -10.11% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.97%
Weekly VaR:
-8.87%
Monthly VaR:
-17.75%
How Much Can the price of
ADM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-14%
Worst case (decline):
-61.49%
This translates to price declining to:
$75.06
This translates to price declining to:
$33.74
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
ADM is a 25.28% riskier investment compared to the market/S&P 500 & is 7.32% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -30.54% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ADM
Beta in relation to market/S&P 500--0.77
Expected beta in 1 year's time:
0.62
Expected beta in 3 year's time:
0.877
Unlevered (debt free) Beta:
0.582
Beta in relation to Nasdaq (XNAS):
0.569
Beta in relation to all global stocks::
0.667
Beta Comparison & Analysis
Beta of competitors/peers::
0.771
Beta is 0.45% higher than peers
Average Industry Beta:
1.117
Beta is -30.66% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.58%
Sustainable growth rate is -11.39% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.202
Alpha is 240802.68% above industry average alpha yield
Alpha is 1286% higher than market/& is unsustainably high
Analysis of Cost of Capital of
ADM
Equity cost of capital:
0.085
Equity cost of capital is -21.72% below industry mean WACC
Unlevered (without debt) cost of capital:
6.36%
Before-tax cost of debt:
1.92%
After-tax cost of debt:
1.51%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.51%
WACC is -26.17% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$160.56
Revenue growth rate per share of (3Y):
2.04
Annual revenue growth rate is 25.52% above the industry average
EPS:
$5.42
Expected Annual growth rate of EPS (3Y):
24.52%
Expected future EPS growth rate is -949.46% lower than the Farm Products industry
Free cash flow (FCF) per share:
$6.96
Balance sheet equity growth per share: 10.62%
Equity growth rate per share is -255.40% lower than the industry
Debt per share
$16.93
EBITDA per share
$8.92
Valuation Analysis Today of
ADM
P/E Ratio:
13.82
P/E Ratio of Competitors/Peers:
22.92
P/E ratio is -39.67% lower than main peers & is -63.98% lower than the industry
Stock price/value with industry average P/E ratio: $208.03
ADM is -57.89% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $40.99
Present value of the expected future dividends only: $22.03
P/S (Price to Sales ratio):
0.55
Price to sales ratio is -58.52% below the industry mean
P/B (Price to book value ratio):
2.04
Price to free cash flow: 12.59
-
Net income growth rate (3Y):
50.48%
Net income growth rate is -304.59% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.35%
Dividend yeild: 1.76%
Previous Dividend: $0.40
Previous adjusted dividend: $0.40
Previous Dividend: $1.54
Expected next dividend best case: $0.41
Expected next dividend worst case: $0.39
Average dividend payment (long-term): $0.37
Average dividend increase/decrease (growth rate) % per period: 1.37%
Expected next dividend payment date: 09/06/2022
Expected next dividend record date: 16/08/2022
Expected next dividend declaration date: 08/02/2022
Previous dividend payment date: 06/08/2022
Previous dividend record date: 18/05/2022
Previous dividend declaration date: 05/04/2022
Dividend History:
2022-05-17--$0.40
2021-11-16--$0.37
2021-05-18--$0.37
2022-02-07--$0.40
2021-08-17--$0.37
2021-02-08--$0.37
Dividend growth rate is -109.02% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
40.01%
Net debt to equity ratio:
54.85%
Debt to assets ratio:
14.63%
Net debt to assets ratio:
20.06%
Debt-to-asset ratio is -53.58% below industry average
Ability to repay debt:
Interest coverage ratio:
18.53
Interest coverage ratio is 43.26% more than industry average
Looking forward:
Debt growth rate:
-4.27%
Annual debt growth is -74% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.675
Statistical significance of correlation:
ADM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.451
Stock price is 49.53% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.451
Correlation of price movement with Nasdaq (^IXIC):
0.056
Covariance of price movement with the market:
0.064
Kurtosis
4.441
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.233
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ADM
Gross Profit Margin Ratio:
28%
Operating Profit Margin Ratio:
3.62%
Operating profit margin is 39.56% higher than the industry
Net Profit Margin Ratio:
28%
Effective Tax Rate:
17.39%
Effective tax rate is -64.87% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
12.96%
Return on equity (ROE) is 75.30% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.74%
Return on assets (ROA) is 17.97% higher than the industry
Financial Leverage:
1.2x
Current Ratio:
1.42
Current ratio is -69.65% below industry average
Cash Conversion Cycle (days):
30.6
Cash conversion cycle is 80.48% above industry average
The remaining useful life of property plant & equipment is: 2.3 years
Stock based compensation to net income ratio:
2.24%
In-depth Efficiency Analysis
Revenue generated per employee:
2.2M
Each employee generates 170% more revenue than industry average revenue per employee
EBITDA generated per employee:
122.0K
Each employee generates 145% more EBITDA than industry average revenue per employee
Profit generated per employee:
75.0K
Each employee generates 182% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 34.7K
Each employee generates 193% more free cash flow than industry average revenue per employee
Assets/Capital per employee
595.4K
Each employee generates 193% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
ADM
THE HERSHEY COMPANY (XNYS:HSY)
Ambev SA (XNYS:ABEV)
SYSCO CORPORATION (XNYS:SYY)
THE KROGER CO. (XNYS:KR)
TYSON FOODS, INC. (XNYS:TSN)
CONSTELLATION BRANDS, INC. (XNYS:STZ)
STZ-B
BF-B
BF-A
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�50%
Sell�4%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
90.01B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
83.67B
6.34B
-
-
3.07B
-
-
3.07B
13.00M
270.00M
1.00B
5.00B
3.26B
3.07B
3.76B
654.00M
3.07B
Statement of Cash Flow
Date:
Period:
257.00M
Differed Income Tax :
144.00M
Stock Based Compensation :
69.00M
Change in Working Capital :
- 2822000.00K
Accounts Receivables:
- 937000.00K
Other Working Capital:
- 482000.00K
Other Non-Cash Items:
82.00M
Net Cash Provided by Operating Activities:
- 1206000.00K
Investments in PP&E:
- 217000.00K
Net Acquisitions:
- 36000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.08B
-
1.08B
7.29B
17.29B
14.80B
40.45B
10.79B
-
-
5.40B
-
1.47B
24.41B
-
64.87B
6.14B
4.60B
389.00M
12.00B
5.79B
28.52B
9.49B
1.23B
12.33B
-
40.85B
3.03B
22.48B
- 1789000.0K
-
March 31, 2022 at 6:00:00 AM
86.74B
23.72B
64.57B
-
14.09B
13.0B
-
- 89000.00K
- 342000.00K
-
-
-
- 226000.00K
3.54B
3.32B
-
1.77B
9.22B
7.45B
- 1206000.00K
- 217000.00K
- 1423000.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
ADM
2023
2024
2025
2026
2027
$119.60
$125.82
$132.37
$139.27
$146.52