Archer Daniels Midland Co (ADM)

[frenchee]

Archer Daniels Shares Falter
SHARES OF ARCHER DANIELS MIDLAND were down 4% in midday trading Monday following a Barron's article which argued that despite the crop processor and biofuel producer's positive outlook, its valuation is unsupported by its margins and profit forecasts.

In "Harvest Time for ADM Shares," Barron's Michael Santoli wrote that there was a significant chance that new capacity in ADM's key businesses would soften pricing and hurt margins, producing a meaningful shortfall to the fiscal 2008 earnings forecast of $2.55 a share.

ADM is plowing new capital into an aggressive ethanol-production expansion program while the economics of ethanol supply and demand are unfavorable.

Moreover, a spate of insider selling at the company hardly seems to validate the Street's overwhelming bullishness. It also doesn't make the stock's current valuation seem like a fruitful entry point.