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Is Archer Daniels Midland (ADM) a Great Value Stock Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Archer Daniels Midland (ADM - Free Report) . ADM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 14.56, while its industry has an average P/E of 16.08. ADM's Forward P/E has been as high as 116.19 and as low as 11.67, with a median of 14.14, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ADM has a P/S ratio of 0.52. This compares to its industry's average P/S of 0.92.

These are only a few of the key metrics included in Archer Daniels Midland's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ADM looks like an impressive value stock at the moment.


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