Unusual Social Activity Around Archer-Daniels Midland (ADM) Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Archer-Daniels Midland ( ADM) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Archer-Daniels Midland as such a stock due to the following factors:

  • ADM has 19x the normal benchmarked social activity for this time of the day compared to its average of 4.68 mentions/day.
  • ADM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $155.7 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

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More details on ADM:

Archer-Daniels-Midland Company procures, transports, stores, processes, and merchandises agricultural commodities and products. The company's Oilseeds Processing segment originates, merchandises, crushes, and processes soybeans and soft seeds into vegetable oils and protein meals. The stock currently has a dividend yield of 2.2%. ADM has a PE ratio of 14.5. Currently there are 5 analysts that rate Archer-Daniels Midland a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Archer-Daniels Midland has been 3.7 million shares per day over the past 30 days. Archer-Daniels Midland has a market cap of $31.3 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.72 and a short float of 1.5% with 3.12 days to cover. Shares are down 4.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Archer-Daniels Midland as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 87.4% when compared to the same quarter one year prior, rising from $374.00 million to $701.00 million.
  • Net operating cash flow has significantly increased by 117.39% to $450.00 million when compared to the same quarter last year. In addition, ARCHER-DANIELS-MIDLAND CO has also vastly surpassed the industry average cash flow growth rate of 56.71%.
  • ADM's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.

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