The Panic-Proof Portfolio (Stockchase Research)
Archer Daniels Midland Company
ADM-N
PAST TOP PICK
Jan 23, 2024
(A Top Pick Nov 16/23, Down 9.3%)Stockchase Research Editor: Michael O'Reilly
Our PAST TOP PICK with ADM has triggered its stop at $67. To remain disciplined, we recommend covering the position at this time. Along with our previous recommendation, this will result in a net investment loss of 13%.
The CFO has been suspended due to questions around accounting. Also there have been operational problems. He got stopped out and replaced it with Deere, a long term buy, since he wants something in the agriculture space.
Does not own shares. Agriculture business that is a giant within sector. Tough business with low margins and high capital requirements. Lots of capacity for grain and seed crushing. Food additive business also growing. Better options available for investors in market.
They sold it and take profits, because they had accounting issues and could not file. When the fraud investigation was announced, shares were in the $80s and he expected it to bounce back. Instead, shares have fallen to $61. Sees no upside.
It's now breaking a long downtrend since late 2022. Investors have been dumping defensive stocks the last two months, but he's been adding defensive because they're on sale--and because a correction is looming. Are paid a 4-5% dividend.
Our PAST TOP PICK with ADM has triggered its stop at $67. To remain disciplined, we recommend covering the position at this time. Along with our previous recommendation, this will result in a net investment loss of 13%.