Owning Total SA Stock In A Retirement Account

Last time I wrote about Nestle, many readers reached out to me asking about the consequences of owning the Switzerland-based stock in an IRA. The straightforward answer: You have to pay taxes to the Swiss government which cannot be avoided by investing in a retirement. The rules of tax treaties only offer protection to those invested in taxable accounts—your taxable rate gets lowered from the foreign country’s sticker rate to your domestic rate.

To use as an example the company on my mind today, French oil giant Total SA, the tax implications work like this: The French government has a sticker tax of 25% on dividends to American investors. If you are an American investor contemplating a stock in Total SA (or any French company paying dividends), the cost-benefit analysis works out like this: Buy Total SA in a regular, taxable brokerage account and your rate gets reduced to 0%, … Read the rest of this article!

How To Read Annual Reports

When I read an annual report, I search for anything that may compromise (or, if I get lucky, enhance) the value of a company’s common stock that would otherwise not be known by merely looking at a balance sheet. 

Since it is better to be more specific than to generalize, I’ll give an example. I recently noticed that XPO Logistics (XPO) has received heavy investments from its management and staff (who own 18.7% of the stock), Orbis Investment Management (that owns 22.3% of the stock), Jacobs Private Equity (17.3% of the common stock), and Spruce House Investment (13.9% of the common stock). 

In the case of Spruce House Investment, a New York hedge fund, 33% of the $2.7 billlion that it manages is allocated into shares of XPO Logistics. The big dog owners of this stock not only own a large percentage of the company overall, but the success-or-failure of … Read the rest of this article!