While the U.S. stock market is the biggest in the world, investors who focus only on companies traded on U.S. exchanges are missing out. That's because 65% of the world's total stock market value is in companies listed outside of the U.S. Many of these companies, however, are working to gain access to investors here by completing an initial public offering or listing on an American exchange.
Three that are heading in that direction are Saudi Aramco, Wanda Sports, and CannTrust (NYSE:CTST). As a result, investors will likely hear a lot more about those companies in the future. That's why we wanted to give you a peek at these coming attractions so that you're ahead of the curve.
Keep an eye out for this oil stock
Matt DiLallo (Saudi Aramco): Saudi Arabia is currently one of the world's three largest oil producers along with the U.S. and Russia. However, while many oil companies pump crude from those two nations, only one produces oil out of Saudi Arabia: Saudi Aramco. Because of that, it's the largest oil producer in the world by a wide margin and the leading holder of oil reserves, controlling a jaw-dropping 268 billion barrels. For perspective, that's enough oil to meet U.S. demand for more than 35 years.
Currently, the government of Saudi Arabia controls all that oil since it's the sole owner of Saudi Aramco. However, it is looking to sell a stake of its oil giant to public market investors in the U.S. After many delays, the country is now hoping to take Saudi Aramco, which is aiming to list on the New York Stock Exchange, public by 2021.
While that listing is still likely more than two years away, investors will be hearing a lot more about the company in the coming year. That's because it's reportedly considering investing in the U.S. liquefied natural gas (LNG) sector to diversify its operations. It has four projects under consideration and could announce a deal in the first half of 2019. In addition, Saudi Aramco will likely start opening its books for the market to see, which it recently did with its oil reserves by releasing an independent audit showing that the company held more oil than many expected.
Given its size and ultra-low production costs, this is an oil stock that investors will want to keep an eye on over the coming years.
The next Canadian pot stock to head south of the border
Todd Campbell (CannTrust): Marijuana is still illegal federally in the U.S., but that's not the case in Canada, where a legal medical marijuana market has been thriving since 2014 and a recreational market opened for business nationwide last October.
The end of prohibition in Canada has been a boon to private companies, which are enjoying considerably higher sales thanks to growing demand and high-margin, value-added products, such as marijuana extracts, including cannabidiol (CBD).
CannTrust isn't the biggest of these Canadian cannabis companies, but its plans include 100,000 kilograms of annual production and that forecast is good enough to position it as a top 10 industry player. Currently, investors interested in owning CannTrust shares have had to buy shares on the Toronto Stock Exchange or take on the risk associated with buying on the lightly regulated over-the-counter (OTC) market. However, that's about to change.
On Jan. 8, CannTrust said it's applied to list its shares on the NYSE. It hasn't said when shares will begin trading yet, but it will update investors with that information once the Securities Exchange Commission signs off on its registration statement and the NYSE gives it the green light.
Listing on the NYSE will open CannTrust up to more investors, including institutions, like mutual funds, restricted from owning stocks listed on foreign exchanges or the OTC market. That may provide important liquidity for raising future capital and ease the path for partnerships, such as the one between competitor Canopy Growth and Constellation Brands, a wine, beer, and spirits company.
It's anyone's guess if CannTrust's shares will head higher or lower after its NYSE listing, but $150 billion is spent on pot worldwide every year and legalization is increasingly moving those sales out of the shadows to companies like it. Given the long-term opportunity ahead of CannTrust, buying shares when they begin trading in the U.S. may be worth considering.
Check out the latest CannTrust Holdings earnings call transcript.
A new international sports play
Travis Hoium (Wanda Sports): Wanda Group is likely to IPO its sports unit, Wanda Sports, in the U.S. in 2019, which could fetch as much as $500 million. The Wanda Group owns assets like AMC Theaters, Legendary Entertainment, and The Hoyts Group, but the sports IPO would contain Infront Sports & Media and World Triathlon Corp.
This may be a good time to both cash in on U.S. markets and sell a piece of some valuable assets. Sports assets are in high demand, what with the amount of money going into sporting events, apparel, and media. That plays right into the hands of a company like the World Triathlon Corp., which runs the Ironman races around the world. The company generates revenue from races to apparel and is the premium name in triathlons.
Ironically, the Chinese company Wanda Sports would be offering a lot of non-Chinese assets in this IPO. But that's because the company has been collecting non-Chinese assets as a way of diversifying its business. But now it is trying to spin off some of those assets and that could give U.S. investors a new way to play the international sports scene.