 Good day, film investors. As I promised, Archer Daniel Midlands stock analysis, you'll give my view, it is a good company, risk adjusted returns, I expect them to be around 8-9% at current prices with really low risk, because this is a company that has been paying a dividend for the last 89 years. Yes, you heard that correctly, 89 years, so we can say that it will pay a dividend in the future. It looks stable compared to competitors that I'll make a video tomorrow about Bungie, it's really stable. If you prefer reading, check my website, my blog, there will be the article published. So let's start with the analysis. The topics here are company overview, investment strategy, a few notes from the last conference call and then my personal opinion on ADN. I also analyzed Bungie, it seems like a cheaper stock given the potential cash flows, but ADM looks like a much better business. What they do, buy food, farm, farm and process it and then turn it into the products or sell it to business customers and then turn it into the food we mostly eat, if you eat processed food of course. Unlike Bungie, they grow by acquiring smaller players and including them into their business model and possibly scaling the smaller acquisition. Neovia is one example, 2019 just closed, so they are adding that animal feed business into their business model, into their chain, business chain and that fits well with their food production and processing distribution. Operating profits are very stable, depends on how commodity prices, margins, crushing, processing go, but we can see stability and it has been so for the last 89 years. Earnings per share are also a little bit volatile, but they are not really going up and down and you see 2009 stable, then 2011 commodity prices were higher, food prices then lower, then higher, then lower, but they are making money year by year. Very interesting, the return on capital is 300 basis points higher than Bungies and 200 basis points above their cost of capital, which shows that they have a good business much better than Bungies. They plan to increase the dividend payout ratio by 30% in the medium term range, which means that the increased dividend payout should lead to constantly higher dividend yields. Thus, what is now 3.24% of a dividend, which is a good growing dividend, could quickly become 5% over the next years. The last quarterly dividend is their 349th consecutive quarterly dividend payment and an uninterrupted record of 87 years of dividend payments. Net debt is smaller than Bungies and the available liquidity allows for flexibility. They have 11 billion, so they can be flexible, invest in other businesses, take advantage of synergies with the largeness of their own channels and chains. And that's what gives ADM looks like a good business and therefore I think it's better to buy ADM than Bungie even if Bungie looks cheaper. The investment strategy, if ADM continues to grow as it did in the past, given that it has the foundation to do so, plus the acquisition potential, I would assume its profits could reach 5 billion per year over the next 10 years, operating profit. So it was 1.6 billion in 2004, now it is 3.4 billion. If they grow, they are investing, they are really in an investment cycle, as the CEO says, for the future and have been over the last years. So we could expect 5 billion per year operating profits, distributions to shareholders would be 50% higher than in the last 10 years, where the dividends paid out were 5.5 billion and buyback 6 billion. So about 50% of the market cap has been paid out, 50% higher that would be let's say 7, 6, 7%, that's a 7% payback yield per year over the next 10 years, including some growth and cyclicality in the food sector. Also, if profits increase 50%, we could estimate the stock price to increase accordingly, so in 10 years the stock price will probably reach 60 at some point. This, if it happens only in 2029, adds another 4.1% yearly yield on the 6.5% that we already estimated, so we are at 10-11% double-digit investment over the long term. If food prices increase significantly, processing margins improve, there could be exuberant periods like it was the case in 2007-2040-2018. Total shareholder equity is 18 billion on a 24 billion market cap, giving some margin of safety, but the accumulated depreciation is 15 billion. We could assume that some things can still be used even if the accounting value is zero. The replacing value could be much higher than the 10 billion carried on the balance sheet. There is also the 24.9 stake in Vilmar, another food company in Asia trading on the Singapore Stock Exchange, 15 billion US dollars market cap. The value there is another 3.75 billion that has to be taken off the market cap of ADM when you do your calculations. A few notes from the last conference called the plan is to save 1 billion from efficiency improvements and digitalization. I remember when I worked for the Dow Chemical, there were all these little projects and I can tell you those improved small efficiencies accumulate over time. I see Dow did manage to improve the margins over the last decade and probably ADM could do the same because it looks like a similar corporate policy. They expect higher interest payments as they are investing now for the long term. Something for example Bungie can't do as it has to deal with its own issues and problems. In 2019 they will complete the acquisition of French animal feed business, Neovia for 1.8 billion in cash. The target Neovia had was to reach 230 million in EBITDA by 2025. Perhaps they will reach it sooner now, but then as it grows, as it is included in the business, then we have again price to EBITDA of what 9, which is let's say okay. The growth story is there with more than 7 billion invested over the last 5 years, including key investments like wild for taste, 3 billion, biopolis for health and wellness, Neovia as we mentioned, Algar in South America, Champtor in Western Europe. They did some joint ventures with Cargill, Egypt etc. that are expected to increase profits in the long term. My personal opinion, I target a return of 15%. ADM is now around 10%, so it has to fall another 30% to be a buy for me. Okay, there is growth, there can be ups and downs, but the market will always be volatile. So I will put ADM on my watchlist, so I will cover the stock, I will read the conference calls, adjust my models depending on what's going on. And then when and if it falls at 30%, then I'll dig deep into it and see okay, now it offers a 15% return or not. However, given the quality of the business, the 87 years of uninterrupted dividends, I don't think ADM will fall that fast to 30%. Maybe there will be in the next 10 years one opportunity to buy that, I'm going to wait for that, but if it's unlikely to happen, so if you want a stable business, a good business, food exposure for the 10% relatively safe return, I would say ADM is a buy. And it's even a better buy than the ingredient that I discussed in the last video, because ingredient also offers a 10% yield but more based on growth and it's not so stable, it's not so let's say large, it doesn't have the efficiencies and power that ADM has. So if I would buy a 10% yielder in the food sector, that would be ADM for the long term and then take advantage a little bit of the volatility, but you get the dividend while you wait. Also something very important, ADM CEO said that low interest rates at the moment allow for a high competition when it comes to investments, everybody gets free money, invest, the margins are crushed and it's a very tough environment. If interest rates increase, ADM will be in a good position, others will be in a bad position, so ADM will buy parts that are good, that are the living returns and this is where I really see, okay, this is the power of the business. So now that things are not good, we see Banji doing not good, ADM still makes money which is a sign that when things will be good, okay, Banji will make money to stock if when that happens they will do even probably better with upside, but ADM will also give you upside, but it gives you much more limited downside which is always key when it comes to investing, risk and reward. You try to limit your risk, not lose money as Buffett would say and leave the upside to whatever happens. If there is trouble, ADM investors will be much happier than Banjis. Tomorrow I'll analyze Banji, just a quick overview. I didn't really like it as an investment, it has potential, but ADM is much better and I'm looking at the food sectors, I'm not going to invest now in ADM, just putting on the watch list, found one stock that might be okay, but more about that later. Thank you for watching, check my website for more resources, more articles, newsletter so that you can get all my content in your email and then see what best adds value to your investing. I'll see you in the next video and I'm looking forward to your comments.