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ADM Should Move to Houston, Not Chicago

Stocks in this article: ADM CVX

Another reason to choose Houston over Chicago? Houston is a major port, and under Woertz, ADM has acquired seven of the eight largest corn export ports, buying GrainCorp of Australia for about $2.3 billion earlier this year. It was ADM's biggest financial deal to date.

While ADM's stock is up 34% so far this year, it's hard to justify that based on the numbers. At that price, investors are paying 20.74 times last year's earnings, although the drought made 2012 an especially bad year. Its dividend yield is 2.07%.

Most analysts following the stock consider it only a hold, with an average target price just a few dollars higher than what it's trading for now, based on an earnings rebound to $3.24 a share.

The company is never more than marginally profitable, there is no top-line growth, and its only bright spot is cash flow.

With the corn syrup market having peaked and the ethanol market showing signs of strain, Woertz seems to have her work cut out for her.

Maybe getting back to her energy roots would change that.

At the time of publication, the author owned no shares in ADM.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Dana Blankenhorn has been a business journalist since 1978, and a tech reporter since 1982. His specialty has been getting to the future ahead of the crowd, then leaving before success arrived. That meant covering the Internet in 1985, e-commerce in 1994, the Internet of Things in 2005, open source in 2005 and, since 2010, renewable energy. He has written for every medium from newspapers and magazines to Web sites, from books to blogs. He still seeks tomorrow from his Craftsman home in Atlanta.
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