ADM Acquired Tate & Lyle Facility to Expand Business
Consumer Sector: Key Updates for February 8-12, 2016
Price movement of Archer Daniels Midland
Archer Daniels Midland (ADM) fell by 3.9% to close at $32.45 per share at the end of the second week of February 2016. The price movement on a weekly, monthly, and year-to-date (or YTD) basis was -3.9%, -2.2%, and -10.7%, respectively.
Technically, the stock has broken its support and is trading below all moving day averages. Currently, ADM is trading 1.3% below its 20-day moving average, 5.2% below its 50-day moving average, and 24.0% below its 200-day moving average.
The FlexShares Morningstar Global Upstream Natural Resources Index ETF (GUNR) invests 3.4% of its holdings in ADM. This ETF tracks an index of companies that operate, manage, or produce natural resources in energy, gas, precious or industrial metals, timber, and water. The YTD price movement of GUNR was -7.0% as of February 11, 2016.
The iShares MSCI USA Value Factor ETF (VLUE) invests 2.2% of its holdings in ADM. The ETF tracks an index of large- and midcap US equities. Stocks are selected and weighted using fundamental metrics (earnings, revenue, book value, and cash earnings), aiming for exposure to undervalued stocks in each sector.
The market cap of ADM’s competitors are as follows:
Bunge Limited (BG) — $7.3 billion
Ingredion (INGR) — $7.0 billion
ADM acquisition of Tate & Lyle’s processing facility
Archer Daniels Midland (ADM) has agreed to acquire a corn wet mill from Tate & Lyle in Casablanca, Morocco, to produce glucose and native starch. This acquisition will be closed during the first half of 2016.
Performance of ADM in fiscal 4Q15 and fiscal 2015
Archer Daniels Midland reported 4Q15 revenues of $16,445.0 million, a fall of 21.3% compared to revenues of $20,894.0 million in fiscal 4Q14. Revenue from agricultural services, corn processing, oilseeds processing, and wild flavors and specialty ingredients fell by 22.1%, 20.2%, 22.4%, and 3.6%, respectively, in fiscal 4Q15 compared to revenue in fiscal 4Q14.
ADM’s net income and EPS (earnings per share) rose to $718.0 million and $1.19, respectively, in fiscal 4Q15, compared to $701.0 million and $1.08, respectively, in fiscal 4Q14.
The company declared a quarterly cash dividend of $0.30 per share on its common stock. This dividend is payable on March 8, 2016, to shareholders on record at the close of business on February 16, 2016.
Fiscal 2015 results
In fiscal 2015, Archer Daniels Midland (ADM) reported revenues of $67,702.0 million, a fall of 16.6% YoY (year-over-year). The processed volumes of oilseeds rose by 5.0% and the processed volumes of corn and milling and cocoa fell by 2.5% and 2.3%, respectively, in fiscal 2015.
The company’s net income and EPS fell to $1,849.0 million and $2.98, respectively, in fiscal 2015, compared to $2,248.0 million and $3.43, respectively, in fiscal 2014.
Meanwhile, its cash and cash equivalents and operating working capital fell by 17.2% and 9.0%, respectively, in fiscal 2015. Its long-term debt-to-equity ratio rose to 0.32x in fiscal 2015 compared to 0.28 in fiscal 2014.
The PE (price-to-earnings) and PBV (price-to-book value) ratios of ADM were 10.9x and 1.1x, respectively, as of February 12, 2016.
ADM has entered into an agreement to purchase a controlling stake in Harvest Innovations. This transaction expects to close in the coming months, subject to regulatory approval.
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