Last month, I discussed the interest level of Seeking Alpha members in different stocks as indicated by the number of email subscribers. That discussion of stock popularity was limited to a list of about 1,000 U.S. companies I had compiled. This month the discussion will be about foreign company stocks trading as American Depository Receipts - ADRs - on the U.S. exchanges. To compile the list I limited the selected companies to those with ADR shares trading on the NYSE, Nasdaq or OTC QX. Companies with market caps of less than $10 billion were not included unless I had specific knowledge about a smaller company or something about a company caught my interest. The result is a list of just over 200 foreign companies trading on the U.S. exchanges or over-the-counter. ADR shares trade just like the listed U.S. company shares.
Before discussing the interest from Seeking Alpha members in these foreign stocks, here is some data about the companies on the list:
- The stocks represent companies from 34 different countries. The top two countries represented are the United Kingdom and Brazil.
- The median market cap is $22 billion. 88 companies have market values greater than $30 billion and 20 are worth more than $100 billion.
- 175 of the stocks have a reported dividend yield with a median yield of 3.5 percent for those companies making dividend payments. 40 of the ADR stocks have current yields of 5 percent or higher. Six stocks yield 10 percent or better.
Using the Seeking Alpha email subscriptions indicator for U.S. stocks, 30 companies have more than 5,000 subscribers and 12 have more than 10,000 subscribers with Apple (AAPL) at the top of the pack, rapidly closing in on 40,000 interested investors. Over 160 U.S. companies have more than 1,000 Seeking Alpha email subscribers.
For the ADR stocks, only $5 billion market cap Alcatel Lucent (ALU) has more than 10,000 email subscribers. Only one other ADR: Baidu (BIDU) has more than 5,000 subscribers and a total of 18 ADR stocks have more than 1,000 subscribers. Remember, this list includes almost 90 companies worth $30 billion or more. The big foreign companies trading in the U.S. generate much less interest than their U.S. counterparts.
The number of email subscribers provides several forms of information useful for investors. A stock with a large number of subscribers indicates a lot of investor interest and there will be a large amount of information provided to satisfy that interest. Low interest stocks provide opportunities to unearth undiscovered winners. For U.S. stocks, the stocks with little interest tend to be mid or small-cap companies in unglamorous sectors. On the international side, there are large cap companies in very high profile sectors which still have small numbers of Seeking Alpha subscribers. There may be even more interesting investment opportunities amoung these international large cap companies than in the U.S. based smaller company stocks.
The point here is that investors looking for undiscovered gems have another source besides the thousands of U.S. mid and small cap stocks. There are some very large international companies not closely followed by U.S. investors - as indicated by the Seeking Alpha subscribers numbers. One ADR, UPM-Kymmene Corp (UPMKY.PK) has zero Seeking Alpha email subscribers. This Finnish company has a $7 billion market cap, a dividend yield of 6.7 percent and has increased the dividend significantly each of the last three years.
A couple of final points for those interested in international companies trading as ADRs in the U.S. OTC Markets has establish a tier of high quality stocks called the OTC QX exchange. Some of the largest international companies have chosen to list their ADRs on the OTC QX. On Seeking Alpha, these ADRs will be a five letter stock symbol ending in Y, followed by .PK. For example, one of the most active OTC QX ADRs is Roche Holding Ltd (RHHBY.PK). I am planning to write an article on an ADR stock once or twice a week. If you are interested in these articles, hit my Follow button in the left column.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.