ADRs make overseas investing safer

Article Excerpt

A great way for investors to gain international exposure is through multinationals that trade on New York as American Depositary Receipts (ADRs). To qualify as ADRs, they have to conform to U.S. accounting and listing requirements, which cuts their risk. These three foreign firms lead their industries and are expanding in fast-growing markets. However, only one is a buy right now. DIAGEO PLC ADRs $125 (New York symbol DEO; Conservative Growth Portfolio, Consumer sector; ADRs outstanding: 627.8 million; Market cap: $78.5 billion; Price-to-sales ratio: 4.2; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.diageo.com) is the world’s largest maker of spirits. Its major brands include Guinness stout, Smirnoff vodka and Captain Morgan rum. In the first six months of its 2014 fiscal year, which ended December 31, 2013, Diageo’s sales fell 0.7%, to 5.9 billion British pounds from 6.0 billion a year earlier (1 pound = $1.86 Canadian). Gains in Latin America (up 8%), North America (up 5%) and Africa (up…

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