BOSTON (MainStreet) -- What's in a name? When companies pick a stock ticker, a lot may be riding on that symbol.
The prime real estate of stock tickers belongs to the one-letter IDs of top companies --
and the like.
Then there are companies whose tickers either help pronounce the company name or trigger instant recognition --
. Others come close, but for whatever reason don't go with the obvious. Hence
, instead of APPL or APPLE.
Sometimes a company will even change its formal name to better match the trading ticker. Minnesota Mining and Manufacturing Co. was quite a mouthful, until, taking a cue from its MMM exchange name, it renamed itself as the much catchier
Then there are the corporate punsters and clever fund managers who have some fun with the name game.
chose that old comic strip trope for a snoring character when it picked
for its trading symbol.
Magma Design Automation
played off its name with
, an ISP, broke out the pocket protectors when deciding to brand itself with
, a reference to its "explosive metalworking" segment.
, which specializes in pediatric and newborn healthcare products, went with
chose the apropos
Harris & Harris Group
, a name meant to remind you that that the venture capital firm specializes in nanotechnology. Piano maker
in honor of Ludwig van Beethoven.
A few others of note: the specialty of
Advanced Medical Optics
is summed up with
; online game company
; Footwear company
; amusement park owner
dug into mythology with
The alphabet soup of company ticker may be even more important than the companies may realize.
Research by Gary Smith, Alex Head and Julia Wilson of California's Pomona College found that clever tickers can actually help boost the value of a stock. The easier a ticker is to remember, the more likely a company will be a go-to play for some.
The professors write that "eye-catching" ticker symbols "might be a useful signal of the company's creativity, a memorable marker that appeals to investors," even if there is a risk investors could alternately think that a "company feels it most resort to gimmicks to attract investors." Among the possibilities are that "investors recall a memorable ticker symbol when they decide which stocks to buy," the authors suggest.
In their research, the authors of
Would a Stock by Any Other Ticker Smell as Sweet
studied the performance of stocks with clever ticker symbols from 1984-2004. That portfolio of stocks, they found, would have "beaten the market by a substantial and statistically significant margin," nearly doubling the annual compounded return of a broader array of NYSE and NASDAQ stocks. Overall, 51 of the 82 "clever-ticker" stocks beat the NASDAQ/NYSE index.
"Over the past 20 years, a substantial number of companies have chosen clever ticker symbols for their stocks," the researchers wrote. "On average, these stocks have outperformed the market by a substantial and statistically significant margin. We do not know why these stocks have done well. Perhaps a clever ticker symbol has been a useful barometer of the managers' ability -- ability that revealed itself over time as the company 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 ... If the latter is correct, then perhaps companies can use a memorable ticker symbol to attract attention."
At times ticker symbols, clever or not, can stir up controversy.
, which uses the ticker symbol
, was apparently confused for Tele-Communications Inc. during an ultimately failed merger with BellAtlantic in 1994. Shares of the Realtor spiked -- for a while.
More recently, lawsuits have sought to protect a company's good name (literally).
In August of last year, Select Sector SPDR Trust
Invesco PowerShares Capital Management for trademark infringement over a series of ETFs they claim were intentionally given similar names (an XL prefix and, in some cases, an added "S" at the end of ticker were the only differences). Courts didn't get the chance to decide whether ticker symbols can be protected or treated as trademarks; the two companies reached an agreement. As part of a deal, the contested PowerShares SmallCap Sector ETFs changed their symbols.
Some sectors and business categories tend to attract creative ticker names, while others are more thematic. We took a look at five such groupings.
LUV is in the air
Among the more colorful tickers is
. Though an obvious use of the word "love," the connection to the budget airline isn't all that obvious.
The origin involves a bit of trivia: The company is based in Dallas, Texas, at Love Field. As the researchers from Pomona University found, the company also used the ticker to reflect its random, open seating policy and the claim that it has led to romances among passengers whom fate seated together. Early on, in-flight snacks and drinks were called "love bites" and "love potions."
In a 2004 story, Reuters reporter Jon Herskovitz wrote of how the airline "has received thousands of letters and scores of wedding invitations addressed to top executives from couples who met on one of its flights." An airline spokesman was quoted as saying: "At times we feel that we are the love brokers of the sky."
Other transportation-related companies went with more obvious choices.
the Guggenheim Shipping ETF
old ticker, HDI, didn't quite capture the company aesthetic. So in 1996 it started trading by the symbol
, the nickname for the style of bikes it specializes in as well as a homage to the
Onomatopoeia reigns when companies take their cue from the animal kingdom.
Market Vectors Agribusiness ETF
chose the appropriate symbol
, while the competing
iPath Dow Jones-AIG Livestock Total Return ETF
uses the more direct
Asia Tigers Fund
plays off its name with
, which owns and operates veterinary hospitals, goes with
Food inspires a healthy serving of unique stock tickers.
, owner of the Chili's and Maggiano's restaurant chains, has
. Another national chain,
, goes by
planted itself with
Teucrium Corn Fund
sums up its commodity specialization with the easy-to-remember
PowerShares Dynamic Food & Beverage ETF
hearkens you back to your school lunchbox with its ticker,
went with the obvious choice of
, while the parent company of KFC broadened its horizons beyond chicken and showcases its other fast food brands as
and the ticker
Molson Coors Brewing
has nonalcoholic Faygo and other sodas shaking up
Dow Jones-UBS Coffee Subindex Total Return ETF
(as in "a cup of ...") and focuses on futures contracts for the mighty coffee bean. Don't be confused though,
( JAVA) has nothing to do with caffeine; it is the name of the programming language and platform developed by
Fund managers may be serious, all-business sorts, but there is still opportunity for some creativity when naming their offerings.
In March, Pimco's
Enhanced Short Maturity Fund
became the very first actively managed ETF to exceed $1 billion in assets under management. The ticker,
, might make you think of printing money, which was the intent for the near-cash, capital preservation strategy of its investments in money markets, longer maturity bonds and investment-grade fixed income securities.
SPDR Barclays Capital 1-3 Month T-Bill ETF
went with the simple
WisdomTree International Hedged Equity Fund
, a "fund of funds," sounds out its strategy as
U.S. Global Investors
, an investment management firm that includes emerging markets among its focus areas, has the ticker
, exactly what one might hope those foreign investments will do for the mutual funds it manages.
Putting some energy into it
iPath Dow Jones-UBS Natural Gas Subindex Total Return ETN
is a mouthful, but its intentionally misspelled ticker,
, tells you all you need to know.
Depending on what commodity or energy specialty you want a fund to track, the tickers can guide you right to them. There is
iPath S&P GSCI Crude Oil Total Return
iShares S&P Global Timber & Forestry Index Fund
Market Vectors Coal ETF
Green-energy advocates can similarly check into
First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund
as in exposure to the sun and the
Claymore MAC Global Solar Energy Index ETF
First Trust ISE Global Wind Energy Index
-- Written by Joe Mont in Boston.
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