There has been an interesting trend in the globalization movement. The U.S. has seen some major brands and major companies get acquired by foreign public companies, but suddenly U.S. investors have a very hard time in investing in those companies again. The NYSE Euronext, Inc. (NYSE: NYX) and the NASDAQ OMX Group Inc. (NASDAQ: NDAQ) have an opportunity to recruit many of these foreign companies to take on full US listings (again for some of them). We also have many products and goods produced by foreign companies which we in the U.S. consume. Despite most of these companies being public, most U.S. investors cannot easily invest in many of these icons. Most brokers do not even know how to trade them. The Peter Lynch method suggests investing in what you know, yet that notion is not possible in many of these companies for most Americans. This form of globalization may feel like isolation for investors who want to own a piece of their favorite brands.
Throughout this decade, it became commonplace for large companies to stop having full listings in the U.S. One reason was over the disclosure and regulatory rules, while some reasoned that the cost of listing was of little to no benefit to the company. Some of these are at least traded OTC or on the Pink Sheets. That is good or at least a start. Unfortunately, most Americans do not know how to invest in these markets. For that matter, most brokers do not either. Here are just some of the companies which trade OTC or on the Pink Sheets:
Acer Inc. of Taiwan has been a US PC seller for more than 10 years now and has been one of the larger entrants for the initial tablet-PC market and then again for the netbook-PC market. It also owns the Gateway brand and even the old Packard Bell nameplate is on its roster. We don’t have its total 2008 annual report yet, but 2007 sales were currency-adjusted $14.07 billion. Acer trades as “2353” in Taiwan and appears to trade some 20 million shares per day there on the local market.
Adidas (ADDDF) is another huge brand which technically can trade but the information looks as elusive as a four-leaf clover. This is now the only mega-brand that competes against Nike and it acquired Reebok when that was a public US company. You either like the stripes or you don’t, but it has a very loyal following. It is an active stock in Germany under the “ADS” ticker.
BAE Systems (BAESY) trades under the “BA” ticker in London and is one of the world’s largest global defense, security and aerospace companies. Its combined sales of Group and equity-accounted investments 2008 were 18.543 billion British Pounds. While its shares trade here in the U.S. on an OTC basis, they are very illiquid.
InBev, or now Anheuser-Busch InBev (AHBIF), is OTC here, but is so illiquid that you might wonder if the company still produces liquid products. How many Americans drink Budweiser, and now have no access to its stock? Hell, you can even call Budweiser an import. Now, investors have to go to Brussels to buy “ABI” shares there.
LVMH (LVMHF) has some of the top luxury brands in the world for a listed company with the name Louis Vuitton Moet-Hennessy. This used to be much more actively traded in the U.S. in the 1990’s, but that is long ago. LVMH trades under the ticker “MC” in Paris.
Nestle (NSRGY) is a great story and its pink sheets listing does actually trade. The company is still growing earnings with many food operations beyond chocolate milk. Think dairy, coffee, cereal, and even pet food. Nestle trades under the ticker “NESN” in Switzerland.
Nintendo (NTDOY) could sure drop this OTC status and take on a listing on the NYSE or NASDAQ. Imagine that Wii was such a huge video game trend, yet very few American investors have been able to invest in this company. The OTC shares are down more than 50% from the end of 2007, but this one saw explosive gains from 2006 to 2007 as the Wii took over. Also popular and drawing attention was the DS system. How many kids in America might have wanted 10 shares of Nintendo in their sock drawer? This is a 12o-year old company that can trace its history back to a card game with the ticker “7974” on the Tokyo exchange.
Roche Holding Ltd. (RHHBY) is one of the world’s largest drug companies and recently completed the acquisition of Genentech. Despite Raptiva facing a market withdrawal, Avastin is still one of the drugs with great promise on the market today for multiple forms of cancer. Now, it is nearly impossible for the U.S. investing public to invest in the company. The RHHBY ticker is there for the OTC stock, but investors really have to tell their broker to go look at “ROG” in Switzerland.
Russian Energy? Many investors are scared of Russia, but there are many who are not. Lukoil (LUKOY) and OAO Gazprom (OGZPF) are two Russian companies which are available over the counter, but again investors have a very difficult time understanding what they would be owning. Lukoil is Russia’s largest oil company with some of the world’s largest proven reserves. OAO Gazprom is supposed to be the largest natural gas producer generating billions and billion in revenues and earnings on a dollar-adjusted basis.
There are many other companies that could easily fit in here such as Samsung, Heineken, BMW, Volkswagen, and on. To show you just how many others are actively traded here in the U.S. we pulled many other names from a much larger list, and we didn’t even include Canada’s Research in Motion (RIMM) along with an average daily volume:
AngloGold Ashanti Ltd. (AU) 3.4 million shares
AstraZeneca (AZN) 1.6 million shares
BP plc (BP) 8 million shares
Elan Corp. (ELN) 3.2 million shares
Fomento Económico Mexicano (FMX), FEMSA, 1.2 million shares
GlaxoSmithKline (GSK) 2.3 million shares
HSBC (HBC) almost 5 million shares
LM Ericsson (ERIC) 9 million shares
Mitsubishi UFJ Financial Group, Inc. (MTU) 3 million shares
Nokia (NOK) 24 million shares
Petroleo Brasileiro (PBR) almost 20 million shares
Rio Tinto plc (RTP) 1.2 million shares
Sanofi-Aventis (SNY) 2.3 million shares
SAP AG (SAP) 2.6 million shares
Sony Corporation (SNE) 2.1 million shares
Teva Pharmaceutical Industries Ltd. (TEVA) 6.5 million shares
Vodafone Group plc (VOD) 4.2 million shares
This list here is just a fraction of the active stocks that are ADRs or ADSs on either NASDAQ or on the NYSE and this list comes to right at 100 million shares per day. With so many stocks technically being given a timeout on meeting the $1.00 bid requirement, maybe the exchanges would like to consider adding the full listings of these foreign companies. At least as long as they don’t think this would take volume away from other actively traded stocks. This is also a way around the exchanges having to go looking for new IPOs.
JON C. OGG