Dykstra: Feasting on ADM's Options

The recent selloff sets up another play in the ag giant.
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With the all-out bullish run seemingly done for now, recent winning deep in-the-money stock plays present excellent buying opportunities again.

For instance,

on May 8 I highlighted

Archer Daniels Midland

(ADM) - Get Report

as a play on the high price of gas and the rapidly growing interest in alternative energy. Ethanol still presents the most easily produced and readily available alternative to gasoline.

That's why ethanol companies such as

Pacific Ethanol

(PEIX) - Get Report


VeraSun Energy


screamed higher last year at this time, as did ADM. Now these companies are all trading far closer to their 52-week lows than their highs, but the similarities end there: Unlike the pure ethanol plays, ADM has an array of agricultural products.

The company is using its diversity to strengthen its position in the ethanol market. The company is building a biodiesel plant in Brazil, which not only enables ADM to produce a larger and cheaper supply of bio-diesel, it also allows the company to forge closer ties with Brazil, the world's leading ethanol exporter with a highly developed ethanol infrastructure.

Access to Brazil would allow ADM to partner with a country that knows how to make ethanol usage widespread and efficient and can provide much cheaper production costs.

ADM also appears in Stockpickr's

S&P 500 Dividend Aristocrats

, which is composed of companies that have consistently raised their dividend over the past 25 years. This shows a commitment to increasing shareholder value. In addition,

George Soros

, an investor who knows how to find cheap opportunities, has recently begun accumulating a position in ADM.

At yesterday's close of $34.38, the stock is even cheaper than the last time I picked the company and scored a quick win. In order to capitalize on this new opportunity, I will place a limit order to buy 10 December 30 calls (ADMLF) for $6.00 or better.

Game of Life

People often relate life to a roller-coaster, whereby life's unexpected twists, turns, ups and downs parallel a roller-coaster's convoluted shape. One day you could be at the top, and the next day you could be at rock bottom. One thing is for sure -- life is not as straightforward as it may seem. Twists and turns appear inevitably, and life demands adaptations and modifications to its initial plan.

For some, the ride is rather smooth, and for others the ride is inconveniently bumpy. Ben Carpenter recently got an unexpected ride when his electric wheelchair somehow attached to the grill of a truck. Carpenter, who suffers from muscular dystrophy, was crossing an intersection when the light turned green and a truck in oncoming traffic unknowingly snatched the handles of Ben's wheelchair.

The truck traveled for several miles as motorists called 911, astonished by the object lodged onto the front of the vehicle. Carpenter didn't think he'd live through the traumatic ride. A pair of undercover police officers happened to witness the incident and pulled the truck over after a few miles.

The driver of the semitrailer was in disbelief when the police officers told him why he was being pulled over. Carpenter was unharmed but was taken to a hospital as a precaution.

While this incident was certainly a glitch on the track, the lesson is universal. Every moment of every day is a part of our journey, and with each up and each down, with each twist and each turn, our rides suddenly change. There's no going backward on a roller-coaster, so looking behind us achieves nothing; our only choice is to move forward.

The Players Club realizes the enigmatic and inexplicable nature of life. By guaranteeing recurring cash flow to professional athletes, through our strategic partner, we hope to make professional athletes' financial rides more certain.

Always remember: Life is a journey! Enjoy the ride!

At the time of publication, Dykstra had no positions in stocks mentioned.

Nicknamed "Nails" for his tough style of play during his Major League Baseball career, Lenny Dykstra was an integral member of the powerful Mets of the mid-1980s, including the world champion 1986 squad, and the Phillies in the early 1990s.

Today, Dykstra manages his own stock portfolio and serves as president of several of his privately held companies, including car washes; a partnership with Castrol in "Team Dykstra" Quick Lube Centers; a state-of-the-art ConocoPhillips fueling facility; a real estate development company; and a new venture to develop several "I Sold It on eBay" stores throughout high-demographic areas of Southern California.