Prudential Public Limited Company (ADR) (NYSE:PUK)

CAPS Rating: 2 out of 5

An international financial services group, providing retail financial services in the markets in which it operates, primarily the United Kingdom, the United States and Asia.


Player Avatar JustSir2u (< 20) Submitted: 11/25/2008 6:59:37 AM : Outperform Start Price: $7.37 PUK Score: +367.64

PUK is expected to siginificantly out perform its peers according to the analysts at the S&P. S&P currently gives PUK a 5 star, strong buy recommendation. PUK apparently has not suffered a lot of the setbacks of others in this industry. For example, they are interested in buying some of the companies being sold off by AIG--AIG's Japanese insurance interests in particular. Also, PUK may be able to take advantage of some changes to laws in India, which will allow them to expand their markets there. They have also had some favorable news that should give them additional inroads to the market in China.

Please read the most recent assessment by the CEO at the Prudential, United Kingdom website. Note, this company has been around since the 1800's and has no link or relationship to Prudential in the United States. I believe they only have a 3% interest in the market within the United States if I am not mistaken.

These shares are really ADRs, which are American Depository Receipts. 23 million+ shares are on deposit at J.P Morgan, called ADS's (American Depository Shares). One ADR is equivalent to two ordinary shares of Prudential (United Kingdom), and receives dividends, voting rights by this ratio as well. An ADR simply allows people in the U.S. to easily buy shares in another country, without having to go to, for example, the London Stock Exchange, to purchase the stock (which of course is much more onerous.) The Royal Bank of Scotland is traded on the NYSE as an ADR, to give another example. (One ADR for RBS is equal to 20 ordinary shares of it on the London Stock Exchange, as compared to the 1:2 ratio for PUK.) Note, prices for PUK and RBS are in pence, not pounds on the LSE. (100 pence (GBX) equals one pound (GBP))

Volume for ADR's does tend to be lower than typical stocks, but still substantial enough to make buying and selling as easy as any other stock. When buying an ADR of PUK, I found it is best to use a limit order because of the difference between the ask and bid. The first time I bought PUK, I did a market order and paid 5 cents more than I thought, because the bid was 5 cents higher than the ask.

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