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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Broken_Clock who wrote (16467)	2/19/2003 4:12:55 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78498

ADM. Pass on it. Too expensive. I'm not going to do an in-depth dd. Gasoline additive rule changes ala California legislation (ethanol) might be excellent for corn producers or their helpers (ADM?). So looking forward, ADM might be a good buy now. Someone else will have to comment. Their management --- they(CEO and son?) were self-serving at one time. I don't know about now. Looking backward though, ROE has not been very good these past few years. Based on the numbers I see and model I use, I wouldn't want to pay more than about $9.50 for this stock. (It's $11.31 now). I am beginning to get the impression that stocks are all dropping to a lower p/e level. (A fear I've had that seems to be coming true.) And that we may have to live for quite a while with these lower p/e levels. It seems to me as I am searching for new, "undervalued" opportunities, there are now a ton of good quality stocks selling for about 12x '03 earnings. That seems - right now - to be another metric for me. I'm trying to stay below that for anything I'd buy unless there's some special circumstance. So from what I'm looking at, unless somebody tells me to look deeper, at best, the most I'd buy ADM for is 12x the .82 ADM is expected to earn (my Dec. '03 interpolation of Yahoo numbers) or $9.85. In other words ADM is overvalued by this quick-n-dirty metric too. JMO, of course. Paul Senior It takes 20x longer to write this than it does to do the analysis. -g-