Agriculture commodity trader Archer-Daniels-Midland (NYSE: ADM) placed its chief financial officer on leave as part of an internal investigation into accounting practices. Investors are understandably concerned, sending shares of ADM down nearly 20% as of 10:30 ET Monday.

The government has some questions about the books

ADM is not typically in the spotlight. But the Chicago-based human and animal nutrition company is on investor radars for all the wrong reasons following a Sunday announcement that it had appointed Ismael Roig as interim chief financial officer.

The company said that Roig is stepping in because current CFO Vikram Luthar was put on administrative leave. The move is part of an investigation by outside counsel and the board’s audit committee focused on the company’s nutrition business.

ADM said it is cooperating with a Securities and Exchange Commission voluntary document request and said it expects to delay its fourth-quarter and full-year 2023 financial results from its usual late-January reporting date. The company expects to report “above $6.90” in adjusted earnings per share for 2023, which is below the $7.28-per-share analyst consensus.

Is ADM a buy after the company’s surprise revelations?

Markets hate uncertainty, and with investigations swirling around ADM’s accounting, the stock is unlikely to get a boost anytime soon. The stock was downgraded by a number of Wall Street banks following the disclosure, with Barclays going from an overweight to an underweight rating on the CFO news and the weaker margins implied by the guidance.

At best, this looks like a situation where investors would be wise to wait and see what happens. But agriculture tends to be a tough business even in the best of times, and ADM even before Monday’s drop had underperformed the S&P 500 over the past five years.

There’s no reason to rush in here and buy the drop.

Should you invest $1,000 in Archer-Daniels-Midland right now?

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Archer-Daniels-Midland Stock Is Plunging Today was originally published by The Motley Fool