Archer-Daniels-Midland Company (NYSE:ADM) had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of $40.29 to $43.3. However, is this the true valuation level of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at ADM’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for ADM

What's the opportunity in ADM?

According to my valuation model, ADM seems to be fairly priced at around 14% above my intrinsic value, which means if you buy ADM today, you’d be paying a relatively fair price for it. And if you believe that ADM is really worth $36.17, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since ADM’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much ADM moves relative to the rest of the market.

What does the future of ADM look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio.Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by a double-digit 16.79% over the next couple of years, the outlook is positive for ADM. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has already priced in ADM’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at ADM? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on ADM, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for ADM, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Archer-Daniels-Midland. You can find everything you need to know about ADM in the latest infographic research report. If you are no longer interested in Archer-Daniels-Midland, you can use our free platform to see my list of over 50 other stocks with a high growth potential.