American Depositary Receipts, or ADRs, are one of the most important items in an international investor's tool kit. To see why, let's consider the following example.
Say you're interested in investing in France. One option is to open a brokerage account in Paris, wire some money over there, convert your dollars into Euros, and then go shopping for French stocks. To say the least, this would be a difficult and time-consuming process. And your accountant would hate you at tax time.
ADRs are designed to eliminate these hassles. An ADR is a security that represents ownership of shares of a foreign company. When you buy an ADR, you technically don't own the foreign stock directly. Instead, you own a piece of paper that entitles you to one or more shares of a foreign stock being held on your behalf at a depositary bank.
NKP Price at posting:
42.5¢ Sentiment: Buy Disclosure: Held
