Menu
Personal finance
Burger King slims down for success
The Penguin-Random House merger: 3 takeaways
Dunkin' weathers storm to attract crowds
Inside Wall Street: Bank weathers its own storm
How Sandy will affect shipping business
The whopping US rally that wasn't
Disney acquires Lucasfilm for $4B
Late-inning earnings plays
Gilead's 'son of Viread' passes first test
Auto sales expected to stay strong into 2013
Why Yamana shares are soaring
Archer Daniels Midland is boring and cheap
Stericycle finds treasure in trash
Don't follow Icahn into Netflix
How to trade the US presidential election
David Einhorn is shorting iron ore
What's next for Exxon after Rosneft buy?
Who's right, Main Street or Wall Street?
Hershey shareholders sue for child labor records
China's growth picks up
Europe offsets Johnson Controls' Asia gains
CSX took too heavy a beating
In retail, pessimism doesn't pay
Illumina should reconsider Roche's offer
Archer Daniels Midland is boring and cheap
Where can you buy large quantities of food at wholesale cost? It would appear you can on the floor of the New York Stock Exchange. That is because Archer Daniels Midland (ADM +0.18%) is selling for less than book value.


It's hard to believe that would be the case in a world with food shortages, inadequate distribution, insufficient arid land, high demand for potable water and seasonal weather patterns wreaking havoc on farmland in the United States, Russia and Africa. But it is.

On Wednesday, ADM closed down for the day, dropping below $27 to finish at $26.84 with a price-to-book of 0.98. Obviously, this is one boring stock. So much so that there has been speculation that cheap and boring might make it a target of the king of boring, Warren Buffett.


Berkshire Hathaway (BRK.A +2.42%) has the cash and is on the prowl. Having a market cap of just under $18 billion makes ADM just about the perfect size target. Its largest rival, Cargill, is privately held.

It is speculation whether ADM might be an acquisition target. Nevertheless, this might be a good time for the average investor, if there is such a thing, to take a look. If you are interested in a large cap stock paying a dividend yield of 2.6% with a very manageable payout ratio of 37%, sporting a puny price-to-sales of 0.20 then this stock is for you. When the market is nearing new highs and the global economy is in tatters it also makes sense to consider rotating out of more volatile stocks into an old dependable.

There are piles of cash that small investors have pulled from the market still sitting on the sidelines. Archer Daniels Midland offers a relatively safe way to re-enter the market. The dividend also makes it a good long-term alternative to bonds, which at current interest rate levels are not a safe place and will not hold their value.

So, what is not to like? For one thing, ADM's net profit margin of 1.06% is teetering on non-existent. The return-on-equity of 5.24% is less than desirable and less than I would normally accept. However, sometimes safety is warranted over the flash of an Apple (AAPL -0.44%), Google (GOOG +0.10%) or Facebook (FB -1.43%), which may indeed underperform the market in the coming year just as ADM is turning around.


For small investors, yield seekers and market bears, boring may be exactly what is needed. In the storm ravaged northeastern U.S. I am sure boring is exactly what they need right now.

Для печати
Microsoft will 'die and disappear' in next few years
Whole Foods' freshness starting to wilt
In a war of attrition, Microsoft will beat Apple again
Asbury Automotive sees strong earnings momentum
Student debtors get the runaround
What to keep in your money survival kit
First-date coupon use is on the rise
Groupon offers NYC dinner in the dark
The worst credit cards of 2012
Post-Sandy, banks waive fees
Homeowners spared costly hurricane deductible
7 ways to commit financial suicide
Why are car loans so easy to get?
Best credit cards after bankruptcy
Get more cash for your old clothes
5 fee-free ways to help Sandy victims
After a flood, frugality can be dangerous
After the storm: Rebuild or move?
My unexpected $2,400 vet bill
Best credit cards for holiday shopping
Downside of a higher retirement age
Prepaid cards are not gift cards
Is the economy destroying love?
Financial lesson from a football game
Book Christmas flights before Black Friday
6 ways to earn extra holiday cash
Holiday shopping? Avoid this retail trick
Many holding out for Cyber Monday
SiriusXM drives straight race to $3 a share
Sandy: Beware the bubble in storm stocks
Starbucks: Buy it, own it, love it
4 Canadian value stocks
What's the White House worth?
Stocks are immune to Washington
EMC strengthens RSA business with acquisition
Russia garners another favorable valuation call
Goldman Sachs slashes partnership ranks
Inside Wall Street: Cheers from Bud and Diageo
4 favorites for a housing rebound
Is Baidu's China reign over?
In 2013, Apple, Facebook will fly, Intel will die
Is AOL's turnaround for real?
Stock buyback blitz continues
Anheuser-Busch pushes higher-alcohol beers
Baidu: Searching for growth in China
Twitter vs. Facebook: The war heats up
Would Disney buy Hasbro?
Vending-machine pizza prepares for US debut
Amazon lockers coming to Staples
Are customers becoming less loyal to Apple?
Focus on earnings, not fiscal cliff
Evergreen stocks: 4 favorite dividend ideas