OTC vs Country Equivalant Results

Question on screening results. I find that when I screen for USA stocks only, I get a number of issues that pass that are OTC of companies from other countries. Most very thinly traded. But when I search for the actual stock in the Country it is trading in, it does not pass the screening criteria like its OTC counter-part. This is very concerning. Any insight would be appreciated. One example is FEEXF which shows up #3 on an Enterprise Screen; this is the USA OTC equivalent of FXPO in the UK which does not show up as passing Enterprise Screen.

Stocks Discussed: 
Ferrexpo PLC (FEEXF)
Ferrexpo PLC (FXPO.L)

Dear BobT,

Thank you for your excellent forum post!

Here are the direct links to Ferrexpo PLC (FEEXF) and your Ferrexpo PLC (FXPO.L) for reference.

As you can see, all Graham Ratings and Graham Grade etc for the two listings are identical; except for the price dependent variables — Graham Number(%), NCAV or Net-Net(%) and Intrinsic Value(%).

This is because FXPO.L lists a Previous Close of Zero.

Whenever there is a discrepancy in currencies between the price and fundamental data for a stock, the stock's price is marked Zero to prevent it from being accidentally cleared on Serenity's screeners.

Thank you again for your forum post!

Thanks, but is there anyway to screen out these OTC equivalents? In theory, I would think that they would not even be listed under the "United States". Also, I have noticed that the price difference between the example above cannot be correct, even if adjusted for base currency. Thank you in advance.

Dear BobT,

Thank you for your comment!

OTC stocks usually tend to have low Size ratings, but that doesn't appear to be the case here.

In fact, the London exchange listing of this stock shows a currency of USD for its financials; which is what is causing its price to be marked Zero.

Thank you again for your comment!

Thank you as always for the quick reply!
I am still confused. Here are current prices for FERREXPO:

FEEXF (USA OTC)= $4.35
FXPO (LONDON EXCHANGE)= $310.60

I even called the USA OTC and they could not explain the discrepancy between prices. When I view the FXPO offering on IB, it is quoted in GBP.
Also, take a look at the FEEXF chart; the volume is almost nil; there is very little liquidity.
So, just going full circle, why would FEEXF, an OTC for a UK issue come up from a USA screen?

I am in no way to be disrespectful or argumentized, I love some of the other names that come to the the top of this fantastic screener you have built. It just seems that some of these very illiquid OTC's should be omitted or at least given the opportunity to screen out.

Thanks again!!

Dear BobT,

Thank you for your comment! All queries are welcome.

U.K. stocks have always been a little tricky since many are traded in GBX (or GBp) while their financials are reported in GBP or USD. The unusual price you're seeing for the London listing is likely the GBX or GBp value.

On Serenity, the requisite code for 100x conversion has been in place for a while now. But since this particular stock was reporting financials in USD, the price was simply marked Zero to exclude it from the screener.

This issue has been raised multiple times in the past by other users.

  1. Dramatic change in intrinsic value
  2. N Brown Group PLC earnings per share

A note to the effect will be added on the blog entries for U.K. stocks and ADRs.

Serenity does not have any criteria for Volume or Liquidity, simply because Graham never specified any. In fact, one of the central ideas of Value Investing is to find unpopular stocks that are good bargains. So screening out stocks for low volume may actually be counterproductive.

Thank you again for your comment!

Graham Resources