Nestle ADR Stock Split !!!

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Nestle Logo

READ AN UPDATE TO THIS ARTICLE here.

Nestle ADR Stock Ticker – NSRGY

Nestle Stock Split 2008 Date: NOT ANNOUNCED yet

Nestle plans a stock split to make its shares easily tradeable. A press release on Feb 22,2008 titled “2007 milestone year for Nestlé: Sales reach CHF 107.6bn, EBIT margin 14%” states the following:

“Board proposals to the Annual General Meeting

The strong performance in 2007 and the positive outlook for 2008 will enable the Board to propose to shareholders a dividend increase of 17.3% from CHF 10.40 per share to CHF 12.20 per share.

The ongoing share buy-back programme has so far resulted in the purchase of 10,196,000 shares between 24 August 2007 and 5 February 2008. The Board will propose the cancellation of 10,072,500 shares amounting to CHF 5.3 billion. Furthermore, in order to increase the liquidity and tradability of Nestlé shares, the Board will propose a 1-for-10 share split. Should this proposal be accepted, the Board would then divide ADRs by 2.5 to achieve value parity with ordinary shares. ”

What does this mean?
This means the stock in the Swiss Exchange is split 10 for 1. Currently the stock trades at CHF 511.50 in the Swiss market. After the split the stock will go for around CHF 51.10 assuming the stock price is the same on the ex-date.

At today’s exchange rate of 1 CHF =US$ 0.99468, a local trades for $508.778 (or CHF 511.50)

ADR:
The stock ticker is NSRGY. This closed at $127.00 on Friday. The current ADR exchange ratio is 4:1. This means 4 Nestle ADR shares equal 1 local Nestle share.

After the split this exchange ratio will become 4 Nestle ADR Shares = 10 Nestle Swiss shares since 1 Swiss Nestle share will be split into 10 shares.

So to achieve parity ( 1 to 1 ratio) with the local Swiss share we have to do a simple math from the above formula:

4 Nestle ADR Shares = 10 Nestle Swiss shares

So, 1 Nestle ADR Share = 10/4 Nestle Swiss shares

= 2.5 Swiss Shares

Thus after the split 1 NSRGY share will equal 2.5 Swiss shares.

Current of NSRGY = $127.00

After Split Price = $127/2.5 = $50.80 (Assuming price remains the same at the time of split)

Hence the ADR price will be cheaper when the ratio is reduced from 4 to 2.5.

When will the split take place?
We do not know now. The date has not been set yet since the board has to approve it first.

READ AN UPDATE TO THIS ARTICLE here.

How many shares are outstanding?
There are about 393M Swiss shares available now.After the split this will become 3.93B.

Summary:

This split will be good for Nestle. The stock is considered “expensive” by many retail investors and will be at attractive levels after the split. So this stock split will boost liquidity of the Swiss shares and also the corresponding ADR stock in the US.

Check back often as updates will be posted when available.

Top ADR Stocks of Brazil

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The following table lists four top Brazilian stocks. This list has been compiled in January-2008 based on the value of an investment of $10,000 made five years ago. The return numbers are from S&P Quantitative Stock Reports.

[TABLE=17]

These four stocks have performed very well over the past few years. An investor who invested in these stocks would have fared much better than an investment in similar US equities. For example – an investment of $10K in the S&P 500 Index would have grown to only $15,435 as opposed to $87,325 if invested in BAK.


TopForeignStocks.com site Relaunched !!!

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We have now relaunched a fully redesigned and improved website of our other site at https://www.topforeignstocks.com

The site has been designed in a simple WordPress theme. A lot of neat ideas are in the works and more articles will be posted over the weekend and in the following weeks. So check it out and leave any comments/suggestions. A simple “Hi” is welcome too if you appreciate what you read here in this blog and the site.:-)

Cheers !!

National Australia Bank(NABZY.pk) – Stock split of a Solid Performer !!!

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For other Australian Bank ADR stocks click here:

Australian Bank ADRs !!

Stock Split:
NABZY used to trade at around $140 back in March. But now it goes for $29.00.How is this possible?

This is because before the ADR stock used to represent 5 NAB share in Australia. But effective March 26, 2008 they changed the ratio to 1:1. This means now 1 ADR stock represents 1 local NAB share. Due to this change, the $140 stock before now got cheaper and sells at a much lower price. This is like giving a 5 for 1 split to ADR shareholders and hence shareholders who held the ADR before the effective date would now have 5 times the number of shares.

Intro:

National Australia Bank is one of the largest banks in Australia. The ADR stock used to be listed in the NYSE as NAB. But last year in June, it moved to the OTC market and now trades as NABZY.

A brief overview from NAB’s corporate site:
“The National Australia Bank Limited is an international financial services organisation that provides a comprehensive and integrated range of financial products and services. Our history traces back to the establishment of The National Bank of Australasia in 1858.

The Group is organised around three regional businesses: Australia, UK and New Zealand. These regions include the retail and business banks, wealth management services and the transactional and custodial operations of the former Institutional Markets & Services division. In addition, we have a global business in NABCapital, which focuses on debt, risk management and investment products for corporate and institutional customers.

Our retail bank brands are NAB and MLC, Bank of New Zealand (New Zealand), Yorkshire Bank and Clydesdale Bank (United Kingdom).”

In Australia the bank has more than 24,500 employees who serve customers through more than 790 branches, 150 business banking centres, 110 regional agribusiness locations and three major contact centres. The region also administers NAB’s presence in parts of Asia – which has a lot of growth potential.

NAB’s Financial Stats:
Stock Ticker – NABZY.pk
Market Cap. – $44.5B (As of April 3rd, 2008)
Shares Out – $1.6B
Dividend Yield – 5.87% (As of April 3rd, 2008)
52 Week Change – Down about 16%
5 Year Earnings growth – 18.95%
Profit Margin – 27.38%
PE – About 11.47

Some of the competitors of NAB are Westpac Banking which trades as WBK and Australia and New Zealand Bank – ANZBY.

Stock Performance:
The stock has had a great run for the past 5 years and the dividend yield is a big kicker too.

An investment of $10K 5 years ago would now have more than doubled. NAB has increased dividend each year in the past 5 of 6 years.

For many years the dividend has been paid consistently and the payout ratio is well over 50%. All these positive factors make NABZY a solid performer !!!

Sources:
www.nabgroup.com