Two Insiders Are Betting On Archer Daniels Midland Company (ADM)

On Feb. 5th, two insiders at Archer Daniels Midland Company (NYSE:ADM) acquired stock from the company. Ray Young, Chief Financial Officer, acquired 3,000 shares of Common Stock at a price of $38.569 per share. Mr. Young now owns about 120,303 shares, valued at more than $4.6 million.

On the same date, Juan Luciano, Executive Vice President and Chief Operating Officer at Archer Daniels Midland Company (NYSE:ADM), purchased 2,612 shares of Common Stock; 2,500 for a price of $38.196 per share, and another 112, for $38.197 each. He now holds 321,727 shares, worth more than $12.4 million.

Archer Daniels Midland Company (NYSE:ADM)

Archer Daniels Midland Company (NYSE:ADM) is a large-cap processor of oilseeds, corn, wheat, cocoa, and other agricultural commodities; and a manufacturer of vegetable oil and protein meal, corn sweeteners, flour, biodiesel, ethanol, and other value-added food and feed ingredients. Its stock trades at 26.8 times the company’s earnings, a slight premium in relation to its peers’ mean of 25.1x. However, most analysts tend to recommend holding on this stock, mainly on account of its below-average long-term EPS growth projections and margins. On the other hand, the stock pays out a generous dividend yield, projected at 2.5% of the current stock price and boasts returns on equity of 7.5% (above the industry average of 6.2%).

Both purchases follow the company’s report of its Q4 results, featuring estimate-beating EPS, mainly on the back of lower-than-expected corn costs.

Furthermore, it is not only insiders that are betting on Archer Daniels Midland Company (NYSE:ADM). Ken Griffin’s Citadel Investment Group –the largest “hedgie” bull- last declared (for Q3 2013) a considerable increase in its position in the stock (+59%). The fund now holds more than 5 million shares. However, this position only comprised 0.28% of Griffin’s Q3 equity portfolio.

In addition, several major hedge funds like Cliff Asness’ Aqr Capital Management, and Peter Rathjens, Bruce Clarke and John Campbel‘s Arrowstreet Capital, not only hold stakes in Daniels Midland Company (NYSE:ADM) worth several million dollars, but have also upped these bets substantially over Q3.


Disclosure: Javier Hasse holds no position in any stocks mentioned

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