ADM's stock confuses me...1/4 of it's profits come from ethanol production and sales. When great news comes out about our govt's ethanol mandates (at least in approved bill form) ADM's stock is flat and all other ethanol producers experience a 5% increase. What gives?
I can appreciate your confusion. The stock price does not reflect the "good news", therefore I'm inclined to believe that the good news is not real. Stock price always reflects the future and there must be something wrong here that the stock is at a 52-week low. I've read posts about other alternative fuels coming from a different kind of plant that put corn at a disadvantage. I don't know how real those other options are, but again, the stock price reflects that Wall Street doesn't support a great future for ADM. Something doesn't add up. I'm waiting to buy once a firm base has been established and the trend is either up or flat.
You are correct in watching a big cap stock - it is hard to outguess the big money which definitely has rolled this back. As for corn and other feedstocks - clearly things are changing everyday but ADM does have a very important infrastucture and logistics and it would be hard to run around this company unless the rendering (animal fats) really start to move on this and overtake. This whole industry could start to be valued as oil refineries were in previous years - profitable but not high growth due to the commodity business. Therefore they were moderate valuations until the bottleneck of the last few years.
Yeah, I lost faith awhile back. I've still got my shares and my Sep and Dec 30 Calls. To hit a home run, though, you've got to be patient at the plate, let the pitcher come to you. The Gov't business about ethanol is only 1/4 of the Biz. therefore, the food biz is the deal. The upward price of Corn is driving the price of ADM downward. Hope some big rains hit the midwest corn belt soon and your shares of ADM will bring sunshine.
The one year chart just sucks. It is on a very steep downhill. One 3 month rally to resistance and downhill to today... We are now hitting downhill resistance, if it breaks out (downward) much more, there may be no stopping it...
Major Manipulation by shorts. Somebody posted a YouTube interview with Cramer a while back how these guys can make a stock move to put fear/gread into investors to make max dollars. I am going to try and find it.
Guidance ,,,,,,other companies provide guidance to the reporters about how things affects their companies, and the lazy reporters report the information that they are given. Investors read the stories and buy the stock. ADM doesn�t do a very good job of talking with reporters, so investors don�t get the hear the good things.