Stocks of hundreds of foreign companies trade on the U.S. markets. For example, about 387 foreign companies (excluding Canada)are listed on the organized exchanges according to BNY Mellon. In addition, over 2300 companies trade on the OTC and OTCQX markets. However only some of these stocks are highly liquid and have a large following in the U.S. while others simply trade under the radar with a few hundred or thousand shares exchanging hands every day. There are also some companies which are rarely traded. This is especially true with companies trading on the OTC markets.
With so many choices available to invest it can be a daunting task to figure out which companies to invest in for an investor looking to add foreign stocks.One way to pick stocks is to identify the ones that are widely held by other investors and then evaluate those stocks for potential addition to a portfolio.
The table below lists the ten most widely ADRs at end of 2013:
|S.No.||Company Name||Ticker||Shares Held||Ownership Value ($)||Dividend Yield as of Dec 31, 2013|
|7||TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD||TSM||1.1B||19.3B||2.87%|
|8||TEVA PHARMACEUTICAL INDUSTRIES LTD||TEVA||452.5M||18.4B||2.73%|
|9||ROYAL DUTCH SHELL PLC||RDS.A||263M||17.5B||5.05%|
Each one of the ADRs has some unique characteristics. Baidu(BIDU) is the largest online search engine in based in China. Royal Dutch Shell, one of the world’s largest oil majors, has two types of shares listed on the NYSE – the A and B shares.However US investors can avoid the withholding taxes on dividends completely if they held the A shares which is the UK version. The B shares are subject to Dutch dividend withholding taxes. Hence the most held Royal Dutch Shell share type by US investors is the A version as shown in the table above. Israel-based Teva Pharmaceutical Industries (TEVA) is one of the most widely ADRs because Teva is the largest generic drug maker in the world and is also one of the world’s large drug companies. So the company has excellent growth potential considering the demand for cheaper generics is rising in most countries.
Disclosure: No Positions