Whether a memorable ticker translates into better performance is uncertain, but it can be indicative of a company's quirky culture or a desire to differentiate itself in the marketplace, writes Freda Ding of Kapitall.com.
Going public is a big milestone for a company. Among the many preparations a firm must make before launching, management will select a unique stock ticker for identification. On the US Exchanges, a ticker is limited to 1-4 capital letters. And while most companies just go with an abbreviated version of their name, others have gotten notably creative with their choices.
Interestingly, studies have suggested stocks with "clever" stock symbols outperform their peers. According to the authors of Would a Stock by Any Other Ticker Smell as Sweet, a portfolio of clever symbol stocks between 1984-2004 would have "beaten the market by a substantial and statistically significant margin."
In trying to explain this phenomenon, one of the researchers writes "Perhaps a clever ticker symbol has been a useful barometer of the managers' ability…[to] repeatedly exceeded investors' expectations. Or perhaps a clever ticker matters because it is memorable and has a subtle, but persistent, influence on investors who buy the stock and on those who are considering a merger or acquisition."
With that in mind, check out the list below for a few of the most interesting company tickers. The average one-year return for this portfolio: 12%.
1. The Cheesecake Factory Incorporated (CAKE): Operates upscale, casual, and full-service dining restaurants in the United States. Market cap at $1.8B, most recent closing price at $33.54. The Cheesecake Factory has grown from its namesake dessert into a chain of 170 restaurants
2. Potash Corp. of Saskatchewan, Inc. (POT): Produces and sells fertilizers and related industrial and feed products primarily in the United States and Canada. Market cap at $34.34B, most recent closing price at $39.86. Potash makes fertilizer...for when marijuana is legalized.
3. Sealy Corporation (ZZ): Sealy Corporation, together with its subsidiaries, manufactures and markets various bedding products. Market cap at $233.14M, most recent closing price at $2.24. For mattress maker, Sealy, soon to be a part of Tempur-Pedic.
4. Southwest Airlines Co. (LUV): Operates as a passenger airline that provides scheduled air transportation in the United States. Market cap at $6.65B, most recent closing price at $9.01. Southwest's symbol references its playfulness.
5. National Beverage Corp. (FIZZ): Develops, manufactures, markets, and distributes beverage products in the United States. Market cap at $680.15M, most recent closing price at $14.69. All that Shasta comes from somewhere.
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