With its innovative technology and products, Panasonic is a global leader in the consumer electronics industry. For that reason, it has caught the attention of many investors looking for promising financial ventures.
However, investing in Panasonic can be confusing, as it trades under two exchange names: PCRFF and PCRFY. So, which company is better?
In this PCRFF vs. PCRFY article, we’ll explore the differences between these companies to help you make a well-informed investment decision. So, keep reading for all the details!
PCRFF Vs PCRFY: Overview
Before we dive into the differences between PCRFF and PCRFY, let’s take a close look at these two companies!
Panasonic Corporation has undergone a structural transformation to become Panasonic Holdings Corporation (PCRFY). The latter adopts a holding company system.
For those wondering, a holding company is a business entity that doesn’t sell or manufacture products. It simply owns and controls the stocks of the subsidiaries.
PCRFF, on the other hand, is the operating division of the industrial solutions company and has maintained its original name, Panasonic.Corporation.
So, when did Panasonic start transitioning?
It all started on November 13, 2020. Panasonic’s Board of Directors announced that they would transition to a holding company system and change its name to Panasonic Holdings Corporation. Such decisions were effective in April 2022.
The goal was to strengthen the company’s management structure to reduce financial losses and ensure growth. However, Panasonic is no stranger to reforming decisions.
You see, the company didn’t always have that name. From its establishment in 1918 until 2008, Panasonic was known as Matsushita Electric Industrial Co., adopting the surname of its founder.
On January 10, 2008, the company announced its name change to Panasonic Corp. to align with its brand name.
PCRFF Vs PCRFY: What Is the Difference?
While PCRFF and PCRFY are technically the same company, they represent two distinct names in the stock market and have several differences. These include their share prices, average volume, and more.
Let’s take a closer look at these elements that set PCRFF and PCRFY apart:
Both the operational division (PCRFF) and the holding company system (PCRFY) trade on over-the-counter US markets (OTCUS).
Unlike exchange markets, OTC operates through a broker-dealer network rather than a centralized exchange. That enables investors to directly deal with each other.
Securities that trade on the OTCUS, such as PCRFF and PCRFY, are not listed on major exchanges like Nasdaq. However, you can still trade stocks, bonds, currencies, and commodities on such a platform.
Several factors cause companies to list on the OTC markets. This includes not meeting the financial requirements of the major exchanges.
For that reason, OTC securities are usually low-priced and have lower trading volumes compared to those listed on major exchanges.
Since PCRFF and PCRFY trade using OTCUS, you may wonder: how are they different?
The thing is that the latter is an American depositary receipt (ADR), whereas PCRFF isn’t.
An ADR is a negotiable certificate issued by a U.S. depositary bank. It represents a specified number of shares of a foreign company’s stock. That’s to allow ADRs to trade on U.S. stock markets just like domestic shares.
That means PCRFY can trade on leading exchange markets. As a result, the company can expand its international footprint and attract more investors, leading to potentially higher revenue!
Recent Stock Price
Although PCRFF and PCRFY don’t trade on major financial markets, they are by no means small companies. With a market capitalization of approximately $28 billion as of July 17, Panasonic holds a prominent position in the OTC market.
The company has even secured a spot on Zack’s number-one-ranked stocks list!
When it comes to stock prices, both PCRFF and PCRFY have displayed similar trends, despite the latter being an ADR. The former typically trades around $11.87, with a daily average of $12.01.
On the other hand, PCRFY’s stock price can range from as low as $11.69 to as high as $11.95. Interestingly, both companies share a similar 52-week range. This range encompasses the lowest and highest prices at which a stock has traded in the previous 52 weeks.
PCRFF has recorded a range of $6.77 to $12.65, while PCRFY’s shares have been between $6.66 and $12.46.
So, it’s safe to say that both PCRFF and PCRFY have been holding steady in terms of their stock prices.
Stock prices aren’t the only measurement of a successful trade; volume also plays a crucial role.
As the name suggests, volume refers to the amount of security sold from a seller to a buyer over a time period—usually within a trading day. It represents the number of shares traded between the stock’s daily opening and closing.
Investors consider trading volume an essential input for technical analysis, as it provides insights into market activity and liquidity.
The higher the stock volume, the more it’s in demand. In contrast, the profitability of a share decreases if a small amount of money moves its price.
PCRFF typically has a daily volume of around 210 and an average volume of 25,600 shares traded. On the other hand, PCRFY scores around 62,571 trades per day, with an average volume of 187,913.
As you can see, PCRFY has higher market activity compared to PCRFF and, thus, higher liquidity. That means the company can easily convert its assets to cash to pay for any liabilities without losing market value.
PE and PEG Ratio
Price-to-earnings (P/E) and PEG ratios are other valuable financial decision tools investors use to assess the relative value of a company’s shares. You can calculate the former by dividing the market price of a stock by its earnings per share (EPS). So, why is this data important?
That’s because the P/E ratio helps determine whether a stock’s price accurately reflects its earnings potential or long-term value.
For instance, if a company’s stock trades at $12 per share and generates $4 per share, its P/E ratio would be 3. Given the former earnings, this company needs 3 years to pay back the investment price.
Now, there are two types of P/E ratios: trailing (backward-looking) or forward (projected) earnings. As the name implies, the former assesses a company’s valuation against its historical performance, while the latter predicts future earnings.
On the other hand, the price/earnings to growth (PEG) ratio is calculated by dividing the P/E ratio by the earnings growth rate for a specified time. That offers a more comprehensive picture than the P/E ratio alone.
Generally, the stock is fairly priced when its PEG is lower than 1.0. The higher the ratio, the more the shares are overvalued.
Turning our attention to PCRFF and PCRFY, we find that PCRFF has a trailing P/E ratio of 14.44 and a forward P/E ratio of 11.61.
On the other hand, PCRFY has a trailing P/E ratio of 14.51 and a forward P/E ratio of 11.67. Compared to the market’s average of 20-25, both companies’ stock shares are undervalued. So, you can expect them to grow and perform well in the future.
As for the PEG ratio within the next 5 years, PCRFF is expected to be 1.22, while PCRFF scored 1.23.
From the above, you can see that the difference isn’t that significant. Both PCRFF and PCRFY have similar expected growth rates, although the former may perform a tad better.
Wrapping Up: PCRFF Vs PCRFY
Although they represent the same company, PCRFF and PCRFY are two distinct names in the stock market, with several differences.
While both companies operate in the over-the-counter market, PCRFY’s status as an ADR provides opportunities for listing on major exchanges and expanding its international reach. Additionally, the company displayed better market activity.
However, both the operational and holding divisions of Panasonic boast steady stock prices, showcasing favorable financial performance and reasonable P/E and PEG ratios.
These factors indicate that PCRFF and PCRFY could be promising investment choices. Still, you need to conduct further research and seek professional guidance to make an informed decision.
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Q. Why did Panasonic (PCRFF) transition to a holding company?
Panasonic transitioned to a holding company system to enhance group management and overcome market challenges, including different political and financial systems in many countries.
The move allows for a better management structure, with operating companies focusing on increasing profit. This transition supports the subsidiaries’ growth and competitiveness in an uncertain business environment.
Q. How did the transition affect Panasonic’s divisional companies?
Panasonic underwent a company split, resulting in the consolidation of various businesses into one company, including the China and Northeast Asia Business, air-conditioning, and electrical equipment businesses, among others.
Other divisions, such as the Gemba process business, will operate individually. Still, all divisions will become wholly-owned subsidiaries of Panasonic. The company will maintain its shares in the divided companies.
Q. PCRFF vs. PCRFY: Which company should you invest in?
PCRFF and PCRFY have similar stock prices, trading volumes, and P/E and PEG ratios, with the latter having higher market activity.
That said, It is challenging to determine which company would be a better investment without considering additional factors. It’s better to seek professional advice and conduct thorough research tailored to your investment objectives to make an informed decision.