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Why do some companies have several different tickers?
Posted by: tuinvest (IP Logged)
Date: April 29, 2014 08:32PM

For example Linde AG from Germany: there is xter:lin1 and xter:lin

stock price as well as 10Y financials totally differ even though it is the same company.

Why is that?

Which one do I choose?



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Re: Why do some companies have the same ticker?
Posted by: batbeer2 (IP Logged)
Date: April 30, 2014 02:41AM

Hi tuinvest,

The ticker is an abbreviation that is only unique within a given exchange.

For example TSCO is the ticker for:

1) Tesco plc on the London exchange but it is the ticker for

2) Tractor supply co on the Nasdaq.

Same ticker, different company. If you find LSE:TSCO then you know someone is referring to TSCO on the London Stock Exchange so it must be the common stock of Tesco plc they're talking about.

Tractor supply would be NAS:TSCO.

Sometimes you'll find the exchange comes after the ticker (like in the table below).

Anytime someone uses the ticker then make sure you know what exchange they're talking about. On this forum, if the exchange is not mentioned, you can assume it's the NYSE or Nasdaq.

Linde AG is about as compex as it gets. It is on many exchanges:

LIN:GR LINDE AG Xetra DE
LNAGF:US LINDE AG OTC US US
LIN:TQ LINDE AG Turquoise GB
LIN:EB LINDE AG BATS Europe GB
LIN:BQ LINDE AG Equiduct DE
LIN:NR LINDE AG NYSE ARCA Eu NL
LINDE:HB LINDE AG Budapest HU
LIN1:GR LINDE AG-SPONSORED ADR Frankfurt DE
LNEGY:US LINDE AG-SPONSORED ADR OTC US US

LIN1 is the ticker for an ADR of Linde Ag. An ADR is not a share. You can think of it as a piece of paper issued by a bank that represents a fraction of a share. The ADR LIN1 represents 10% of an ordinary share. You can google "Linde ADR" to find out the ratio.

Just to make it totally obscure someone decided it was a good idea to trade the ADRs in Frankfurt alongside with the common. So now in Frankfurt you have LIN and LIN1. LIN is the ticker for the ordinary shares and LIN1 is the ticker for the ADR.

The ADRs trade at EUR 15.40 or so while the common trade at EUR 148. Given that the ADR represents 10% of the common, the common is slightly cheaper.

Hope this helps.



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Re: Why do some companies have the same ticker?
Posted by: batbeer2 (IP Logged)
Date: April 30, 2014 02:42AM

-



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Re: Why do some companies have several different tickers?
Posted by: tuinvest (IP Logged)
Date: April 30, 2014 04:05AM

Hi batbeer2,

thanks that helped a lot.

How do you actually know that XTER:LIN1 is an ADR? Is it because of the number in the name or due to the low price? Unfortunately, I can't find any hint on the LIN1 site. Furthermore, how do they calculate the 10Y financials for ADRs? Do they just take a percentage of the original stock's financials. My calculations could not find a factor.

If we look at Autoliv Inc (FRA:LIV or FRA:LIVS) then it seems to be the same stock twice at the same stock exchange. The stock price and some other financial data sligthly differ but not enough for me to assume it was an ADR (another example BASF: XTER:BAS and XTER:BASA.) What would be an explanation here?

Sorry for so many additional question, I'm still a little confused ;)



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Re: Why do some companies have several different tickers?
Posted by: batbeer2 (IP Logged)
Date: April 30, 2014 08:04AM

>> How do you actually know that XTER:LIN1 is an ADR? Is it because of the number in the name or due to the low price?

The number is not important but the price differential is a big hint. Very rarely do you have an opportunity to buy the same security at significantly different prices at the same point in time.

Often, with similar tickers, it's an ADR or just two different securities (wertpapiere) of the same company. For example, Berkshire's A shares and B shares are different securities.

In short, 99% of the time it's not worth the trouble of digging into the details.

Francis Chou is a very good investor. He's not interested in the 99%. He wrote about a rare situation in London in his latest letter. What he noticed is that the "same" ticker bought you two companies in London. It only got you one in Moscow. Investors didn't know what they were buying and priced the different but similarly named securities at the same price. I didn't read that newsletter immediately so I missed it. D@^mn! The opportunity is gone now.

In any case, if you type "LIN1" in the morningstar.com searchbox it will tell you LIN1 is an ADR. That's where I started. I subsequently googled "Linde ADR ratio" to get a bit more info.

Morningstar is quite good at giving the full name of the security. Gurufocus is more focussed on the company and its financials. Sometimes gurufocus doesn't make it clear precisely what the security/ticker represents.

When in doubt, find out the ISIN code.

Two different securities will have different ISINs. An ADR will not have the same ISIN as the plain vanilla common stock. The reverse too is true. If you can buy the same security on different exchanges, the ISIN should be the same regardless of the exchange they are traded on. Maybe you can look at Guinness Peat group if you like to get parctical/dirty.

I wrote about Guinees Peat a while ago. I think you can get the shares in New Zealand more easily than you can in London. But at the end of the day, they are the same security. A good broker should be able to let you buy on one exchange and sell on the other.

A bank can buy a block of shares and then create ADRs representing (some fraction of) those shares. The company doesn't have to like it. That is one reason why you will not always find the information on a company's website. It is a good place to look but half the time you won't find what you're looking for.

You asked how I know.....

I've done some work on companies with different classes of stock in Canada, Germany, Italy, France, and the Netherlands. I have a mental list of the interesting ones (same assets, different price). Heineken and Heineken Holding are an example in the Netherlands.

Linde wasn't on my list of "interesting" situations. That is why I read your comment in the first place. I hunt for stuff like that.

By the way, I think Linde is a very good business. Well managed too. Within its space, it may be the best. I've looked at Linde in the past but it never got cheap enough for me.

If you aren't confused, you probably don't understand it well enough - Munger



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Re: Why do some companies have several different tickers?
Posted by: tuinvest (IP Logged)
Date: April 30, 2014 09:25AM

Hi batbeer2,

really a great answer, thank you!

My first thought was to work with ISIN codes but unfortunately gurufocus does not recognize them. I'll find a way to deal with the circumstances, at least I have a clue now about different tickers.

Cheers!



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Re: Why do some companies have several different tickers?
Posted by: 99th.co.in@google (IP Logged)
Date: May 12, 2014 06:50AM

This is very useful information shared here. I am really thankful for this.

[www.99th.co.in]



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Re: Why do some companies have several different tickers?
Posted by: 99th.co.in@google (IP Logged)
Date: May 12, 2014 06:50AM

This is very useful information shared here. I am really thankful for this.

[www.99th.co.in]



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