Trade-Ideas LLC identified Archer-Daniels Midland ( ADM) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Archer-Daniels Midland as such a stock due to the following factors:

  • ADM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $119.1 million.
  • ADM has traded 1.2 million shares today.
  • ADM is trading at 10.10 times the normal volume for the stock at this time of day.
  • ADM is trading at a new low 9.01% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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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 2.5%. ADM has a PE ratio of 13. Currently there are 2 analysts that rate Archer-Daniels Midland a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Archer-Daniels Midland has been 3.6 million shares per day over the past 30 days. Archer-Daniels Midland has a market cap of $27.8 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.23 and a short float of 2.2% with 4.74 days to cover. Shares are down 11% 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 reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.77 is somewhat weak and could be cause for future problems.
  • ADM, with its decline in revenue, underperformed when compared the industry average of 9.3%. Since the same quarter one year prior, revenues fell by 20.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength 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.
  • ARCHER-DANIELS-MIDLAND CO's earnings per share declined by 23.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ARCHER-DANIELS-MIDLAND CO increased its bottom line by earning $3.43 versus $2.03 in the prior year. For the next year, the market is expecting a contraction of 11.4% in earnings ($3.04 versus $3.43).

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