NEW YORK ( TheStreet) -- Archer-Daniels Midland Company (NYSE: ADM) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
- Despite the weak revenue results, ADM has outperformed against the industry average of 24.2%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.57, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- The gross profit margin for ARCHER-DANIELS-MIDLAND CO is currently extremely low, coming in at 4.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.30% trails that of the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Food Products industry and the overall market, ARCHER-DANIELS-MIDLAND CO's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff