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VIDEOTicker Shock: Three Reasons Why ADM's Still a Staple
Monday's top stories and stocks with potential to move.
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Anyway, the plan was to clean a patch of sidewalk and call it a day. But I figured I'd paid for the machine for the entire day, so I tried it out on a section of fence in my backyard, too. Unfortunately, when I stepped back to take a look at my work, the cleaned section no longer matched the rest.
So let’s just say 5 hours later, soaking wet, on what I might add was a pretty cold day, I finished. Oh, and the rest of Saturday and part of Sunday was spent getting all of my receipts and tax stuff together.
That was my weekend. I hope you had a more enjoyable one.
Asian stocks rose overnight. The Hang Seng was up better than 3% and the Nikkei was up nearly 2%. Europe was in positive territory earlier this morning as well. And here in the US, we're currently trading higher.
Kind of a slow morning on the earnings front, so I wanted to quickly touch on 2 companies that are on my radar screen because frankly, I think they're disgustingly cheap.
Archer Daniels Midland (ADM):
Talk about a Rodney Dangerfield stock - this baby gets no respect.If you aren’t aware, these guys make or process ingredients that go into all kinds of food -staples like corn sweeteners and flour. And I’m thinking about nibbling right here.
Here's why:
1. I think the more people there are on this earth, the more money the company stands to make. It's a cliché, but we all really do have to eat.
2. Beyond that value, the company trades at under 8 times the current-year estimate of $3.54 - yet it’s expected to grow 15% per annum in the next 5 years. Also, it pays a dividend, and the forward yield is 2%.
3. Finally, the stock has rebounded nicely over the past week or so with the rest of the market, so that gives me some confidence, as well.
Marriott (MAR):
Yeah, I know the economy stinks. People aren’t traveling, yadda yadda yadda, but I think the company is worth more than a passing glance at this point. For one, even though the average estimate for the current year has been ratcheted down pretty heavily over the last 90 days, from $1.30, these guys are still expected to put up $0.89 and $0.94 in 2010. Can you imagine what earnings might be under normal conditions? This has me intrigued, to say the least.
Then there’s the dividend. The forward yield, by my math, is about 2.3% - which I like to think is a nice little bonus, akin to getting a mint on your pillow. Oh, and in spite of all the doom and gloom, the data I’m looking at shows an insider purchase of 100,000 shares in February. In short, all of this makes me think that I should be checking in as well.
Just wanted to toss that out there, folks - kind of a counter-intuitive play, I know.
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