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Should Value Investors Buy Archer Daniels Midland (ADM) Stock?
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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.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Archer Daniels Midland (ADM - Free Report) . ADM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.08 right now. For comparison, its industry sports an average P/E of 11.99. Over the past year, ADM's Forward P/E has been as high as 14.06 and as low as 9.95, with a median of 11.71.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.39. This compares to its industry's average P/S of 0.75.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Archer Daniels Midland is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ADM feels like a great value stock at the moment.
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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.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Archer Daniels Midland (ADM - Free Report) . ADM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.08 right now. For comparison, its industry sports an average P/E of 11.99. Over the past year, ADM's Forward P/E has been as high as 14.06 and as low as 9.95, with a median of 11.71.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.39. This compares to its industry's average P/S of 0.75.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Archer Daniels Midland is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ADM feels like a great value stock at the moment.