Are you a video game addict? If yes, then you’ve probably heard of the Japanese video gaming company Nintendo at some point – or you may own some Nintendo games which you play regularly. Nintendo has a solid reputation as a creator of unique video games which is why their brand resonates loudly in the minds and wallets of consumers globally.
Not surprisingly, some people are wondering how they can acquire stock in the Nintendo company itself due to its profitability. Though this is debatable, it won’t hurt to learn more about how you can purchase Nintendo stock for your own benefit.
Getting To Know Nintendo
Nintendo is a very profitable company because of the unique and completely original ideas it has come up with for their video games. Examples of popular video games from the company are “The Legend of Zelda” and “Super Mario Brothers”. Aside from video games, the company also sells its innovative gaming consoles globally.
The company was originally a Japanese playing card manufacturer and retailer in its home country. Eventually, Nintendo was able to branch out to the world market with its appealing video games. At the moment, Nintendo is trying to expand into film production as well.
Steps for Buying Nintendo Stock
The first thing you have to remember about Nintendo, if you want to acquire shares, is that it is a Japanese company. So if you are a US investor who wants to buy stock in the company you must learn the legal process in the US stock exchange to make your stock purchase legit.
You will need to acquire an ADR or American Depository Receipt to be able to buy shares in Nintendo. This ADR will represent a fraction of an ADS or American Depository Share. It is the ADR that you have to buy. The ADS is the actual share in the company.
You can acquire this ADR from U.S. depositary banks or from brokerages. Bear in mind though that each ADR only amounts to a fraction of an ADS. Nintendo itself determines the ratio of ADR to ADS. So, for example, if you acquire 10 ADRs of Nintendo at a 10:1 ratio then the 10 is equal to one ADS of the company. The ADS itself is safely stashed in Japan since the Nintendo company is based there.
If you intend to invest in Nintendo ADR in the US, you may use the NTDOY ticker symbol via an over-the-counter transaction. Alternatively, you can trade with the NTDOF symbol instead. You may observe the trade movements of the NTDOY and NTDOF independently of each other to see which one is more profitable for you.
The Advantage You Gain
One reason people really want to invest in Nintendo stocks is that the company is really very popular and profitable right now, making it a good buy for investors. The other advantage is that a buyer of Nintendo ADR doesn’t have to deal with a lot of foreign exchange issues. At the same time, an ADR owner is allowed to receive dividends of the Nintendo share/s bought and will not need to set up a special brokerage account just for the investment. You will also qualify for capital gains this way.
This ADR process makes it easier for investors to buy and sell Nintendo shares in the US stock exchange. It is an old system that was initially introduced in the US stock market in 1927. Stocks just became more well known than the ADR process over the years.
ADRs are the less costly alternative to stocks. It’s also less of a hassle for investors who want a foreign company’s shares in their portfolio. With conventional stock trading, you would have to go through a lengthier investment process, inclusive of taxation rules.
Why Is Nintendo a Good Buy?
First of all, Nintendo takes pride in its very original and interesting game franchises. Unlike other gaming titles, the Nintendo games are not about blood and gore alone. You can expect your Nintendo share purchase to be a sound choice because Nintendo games are popular even with young kids. As a kid-friendly gaming company, they offer gaming consoles that are designed for kids too (depending on which gaming console you purchased).
Second, the company does offer dividends. Plus, at the moment, Nintendo is buying back its own shares as a business strategy. So you can buy the shares now and just hold on to these until you see your preferred share price reflected at the US stock exchange.
In addition, the names of the Nintendo company, its game titles, and the gaming consoles themselves have strong brand recall in the minds of consumers. The company makes it a point to develop game storylines, special effects within the video games, and the hardware you will use to play with (meaning the gaming consoles) that are of high quality. This means Nintendo has a solid base of satisfied customers throughout the world who will probably buy more of the Nintendo products in the future. Because the company standards are really high.
Buying Nintendo ADRs right now may be a good buy if you’re after a long-term investment that will pay off bigger in the future compared to stock trading. Considering the company has been consistently profitable, due to sound business strategies that do provide value to its customers, you can consider a purchase of Nintendo ADRs as a step in the right direction.