Samsung is a household name all over the world, and for good reason.
Samsung’s smartphones account for the majority of global Android phone sales, and the company is a strong competitor in a number of other markets.
Global technology behemoths are frequently excellent investments, and Samsung’s dominant position has many investors wondering how to purchase stock in the company.
Samsung is a South Korean company that does not trade on any major stock exchanges in the United States of America.
Investment becomes a little more complicated as a result, but it is still possible. Now, let’s take a closer look at the company and a few different options for investing in Samsung stock.
What exactly is Samsung?
It is what the Koreans refer to as a chaebol, which means a diversified industrial conglomerate in English.
The Samsung Group consists of numerous subsidiaries engaged in a wide range of business activities.
Samsung Electronics is the largest and most well-known of the Samsung Group’s many subsidiaries.
Samsung Electronics is a multinational corporation that manufactures mobile phones, memory chips, LED and LCD panels, laptops, appliances, and a variety of other products.
It generates approximately 70% of the total revenue for the Samsung Group.
Other subsidiaries of the Samsung Group include the world’s second-largest shipbuilder, as well as companies involved in construction, insurance, health care, and a variety of other industries.
Samsung is by far the largest company in South Korea, with revenues exceeding $1 billion.
Its products account for approximately 20 percent of the country’s exports, and its revenues account for approximately 17 percent of the country’s gross domestic product.
Samsung subsidiaries conduct business as if they were independent corporations.
The shares of Samsung Electronics Inc. are being discussed when we discuss how to buy stock in Samsung Electronics Inc.
6 Reasons Why Should I Invest in Samsung Stock Market?
1️⃣ Smartphones that are adaptable
Samsung’s foldable smartphone, which has been in the news for quite some time, should become a reality in the near future.
According to the company, the smartlet will be a 5-inch smartphone that can be expanded to become a 7-inch tablet when not in use. According to the Korean news website ETNews, Samsung is aiming to release the smartlet by the end of 2017.
It is not only the foldable smartphone that is depicted in Samsung’s patent application publication but also designs for a scrollable and bendable smartphone as well.
However, there is currently no information available about the release or production of the other smartphone options.
The smartphone market is flooded with regular smartphones, and it is possible that it is oversaturated at this point.
The potential for a disruptive product like smartlet to gain traction exists as a result of these factors.
2️⃣ Artificial Intelligence (AI)
It is a term that refers to the study of artificial intelligence.
Samsung recognizes that Artificial Intelligence (AI) is on the verge of becoming mainstream, and as a result, it has sought to invest in AI companies such as Vicarious Systems, Reactor Labs, and Maluuba.
An analysis by CB Insights found that Samsung Venture Investment ranked fourth in terms of size among global companies that have made investments in artificial intelligence start-ups in the last five years (2010-2015).
“Things we do on our smartphones will become much more convenient as a result of artificial intelligence.
Customer loyalty will increase dramatically as a result of your well-trained phone, according to Rhee In Jong, EVP, Head of R&D, Software and Services at Samsung Electronics Mobile Business Division.
3️⃣ Real-Time Virtual Reality (VR)
Virtual Reality (VR) is another popular term in the technology industry.
Samsung’s Gear VR, which is powered by Oculus and works seamlessly with the company’s smartphones (including the Galaxy S7|S7 edge, Note5, S6, and S6 edge), is already available.
An IDC report estimates that the shipment of Virtual Reality (VR) hardware will see a significant increase in 2016, with products from Sony, Samsung, HTC, and Oculus leading the way with total volumes reaching 9.6 million and revenue of approximately $2.3 billion.
It also predicts that the volume of virtual reality hardware will grow from the current 0.4 million units to 64.8 million units by 2020, representing a 183.8 percent compound annual growth rate (CAGR, 2016-2020), while the volume of augmented reality hardware will grow from the current 0.4 million units to 45.6 million units by 2020, representing a 189.8 percent CAGR (2016-2020). (CAGR, 2016-2020). Samsung believes that virtual reality (VR) will be the “future of how we interact with media.”
4️⃣ Samsung Pay
Samsung Pay has partnered with Verifone to help the company’s mobile payment service gain traction more quickly (PAY).
Merchants and consumers will benefit from the partnership, which will help to encourage further adoption.
Currently available in the United States, South Korea, and China, Samsung Pay is expected to be introduced in Singapore during the second quarter of 2016.
5️⃣ Samsung’s history, as well as the stock of Samsung
Despite the fact that Samsung has been available to the public for many decades – since 1973 – On the Korean stock exchange, the company had 59 unlisted and 19 listed companies, for a total of 61 companies.
Even if you had purchased the main Samsung stock, which is traded under the ticker symbol 005930, in 2011, you would have received a return on investment of 145 percent (excluding dividends).
The following chart depicts Samsung’s price history as of August 2018.
6️⃣ Their Finance Management
Samsung has been a dominant company for many years, and its growth rates are not exceptional.
However, the company has remained profitable year after year, even in the face of the COVID-19 pandemic.
Samsung’s consistent profitability has been matched by an equally consistent profit margin. Samsung’s Gross Profit Margin typically ranges between 35% and 48%.
Because of its already-dominant position, Samsung has a limited margin for growth: the company requires market growth to sustain revenue growth.
Samsung compensates for this shortfall by paying a dividend of 1,416 Korean Won per share, for a 1.74 percent yield.
Different Ways To Invest In SAMSUNG stocksInvesting Option
The shares of Samsung do not trade on major stock exchanges in the United States, such as the Nasdaq and the NYSE.
It is traded on the Korean exchange and is also available as a GDR in London and Luxembourg, among other places.
Individuals from the United States are not permitted to invest in GDRs, according to Rule 144A of the United States Securities and Exchange Act of 1934.
The following options are available to investors in the United States:
After completing the necessary paperwork, investors can purchase shares directly on the Korean stock exchange, or they can purchase shares through a local securities firm or bank (Merrill Lynch, Pierce, Fenner & Smith Inc. are eligible) Over-the-counter (OTC) investors in the United States can purchase Samsung shares.
A South Korea exchange-traded fund (ETF) can be used to gain exposure to Samsung as well as other Korean companies.
For example, the iShares MSCI South Korea Capped ETF (EWY) has a significant 20.64 percent exposure to Samsung Electronics Co., Ltd. (Samsung).
Instructions on how to purchase Samsung stock
You adore Samsung so much that, since you are unable to marry it, you wish to at the very least own a small portion of the company.
However, there is a problem.
Becoming a Samsung investor is a little more difficult.
It is, without a doubt, possible; continue reading and we will explain how.
1. Determine whether Samsung stock is the only stock you wish to purchase.
We’d like to speak with you before you make any purchases, whether it’s Samsung stock or any other stock for that matter.
Are you certain that you want to purchase a single share of a company’s stock?
Achieving success in stock picking is extremely difficult.
Buffett, the famously wealthy stock picker, has spent the last several decades discouraging almost everyone who isn’t named Warren Buffett from attempting to make money by picking individual stocks.
A cross-section is not created by a single stock.
The purchase of an aggregate of companies, as well as bonds and real estate, can be accomplished with relative ease through the use of a Robo-advisor.
It is up to you to determine whether or not you are more knowledgeable than the financial Yoda, which has an estimated net worth of $81 billion.
Picking individual stocks is a lot like playing the lottery in terms of risk and reward.
In the case of American stocks, the top 4% of the best-performing stocks have accounted for nearly all of the wealth creation in the US stock market since 1926, implying that there has been a plethora of unsuccessful stock pickers over the years.
Are you confident that Samsung will continue to have the kind of upward trajectory that you desire for the foreseeable future?
If you’re certain that you want to invest in Samsung, there’s a lot to be said for the “mad money” approach to investing in stocks. This is great news if you have an appropriately diversified investment portfolio and a small amount of discretionary, or “mad” money on hand that you would like to use to speculate on the stock market.
Toss the dice and see what happens. However, a good rule of thumb is that you should not risk more than 5% of your total portfolio when you gamble.
2. If you are certain that you want to purchase Samsung stock
If you are certain that you want to purchase a stake in Samsung Electronics Co. Ltd., you have a few options to choose from.
KRX stock is being purchased.
Interested American investors can purchase Samsung stock through a local broker in South Korea, or they can invest directly in the company (after filing the appropriate paperwork).
A South Korean Financial Supervisory Service investor registration certificate (IRC) is required for the latter, which requires an investor to obtain an IRC from the Financial Supervisory Service.
Afterward, a stock trading account at a Korean securities firm can be opened, funds can be transferred, and shares can be traded in real-time on the stock exchange.
The paperwork required for the transaction, which includes a standing proxy agreement, investment ID application, signature registration, the criteria used to determine whether the investor is a non-resident of Korea, and, most importantly, an original copy of the investor’s passport1, is extensive.
Investing with a local broker, such as Merrill Lynch International Inc., is simple and requires only the opening of an account, the deposit of funds, and the placement of trade orders. Of course, investors will bear the financial burden in the form of fees, not to mention the additional currency risk associated with having to exchange Korean won for US dollars and back again.
Following all of this, traders will be required to meet minimum order sizes, will be required to trade during local trading hours, and will not be permitted to trade on margin.
3. Gender Pay Gap in the Pink Sheets/Grey Market
With the help of the National Quotation Bureau’s Pink Sheets, prospective investors can locate shares of Samsung that are available on the Grey Market, which is a market where securities are traded over the counter.
3 Investors will continue to receive dividend payments in this situation, though they may lose their voting rights.
Nonetheless, there are some potential drawbacks, including a lack of volume (and thus liquidity), as well as wide bid-ask spreads, which make it difficult to sell shares quickly.
In addition, transparency — such as the reporting of daily trading — is minimally enforced.
It is advisable for anyone trading Samsung OTC to use limit orders rather than market orders in order to account for the bid/ask spread disparity, which is present in the market. ) (For more information, see Pink Sheets in the Over-the-Counter Market: An Introduction.)
4. Investing in exchange-traded funds (ETFs)
Exchange-Traded Funds, or ETFs, that are focused on the Korean stock market are another option for readers who want to gain exposure to Samsung Electronics.
On February 2, 2021, the top holding in the iShares MSCI South Korea ETF was Samsung Electronics, which had a 23.11 percent weight in the fund’s portfolio as of that date.
The disadvantage is that other Korean listed companies that are included in such Korea-focused ETFs may underperform, which means that even if one is correct about Samsung Electronics, one could lose money on these ETFs if one invests in them.
5. Locate a suitable broker.
Investors outside of Korea who want to buy shares in Samsung must find brokers who are authorized to trade on the local exchanges.
Orders are typically placed over the phone, in person, or via email rather than online.
On our Best Online Brokers page, you can find Benzinga’s picks for the best online brokers.
Should You Invest in Samsung?
All investments involve some level of risk.
An investment in Samsung is no exception.
Samsung is relatively well-protected against many investment risks.
With a diverse range of products, the company serves a very broad range of markets. Although Samsung is not immune to a global recession, the company is unlikely to be seriously impacted by upheaval in a single market or product line.
That safeguard is insufficient.
The mobile phone market, in particular, is extremely competitive, and other manufacturers may launch superior products that reduce Samsung’s market share.
Samsung may be exposed to political upheaval or conflict on the Korean peninsula.
A bigger concern for US investors may be that Samsung only trades on the Korean market, limiting purchases from US investors.
As a result, the valuation is lower than that of many other tech leaders. Apple’s 2020 P/E ratio, for example, was 38.67, while Samsung’s was a much more modest 18.9.
While the stock’s relatively limited trading keeps the valuation reasonable, it also prevents US buyers from driving up the share price.
Before investing, you should think about all of these risks and more. Before making any investments, it is always a good idea to consult with a qualified financial advisor.
Future Prospects for Samsung’s Stock
Samsung has been around for a long time and will most likely be around for a long time to come.
In order to maintain its market dominance at the forefront of technology, the company continues to reinvest in its future.
If the company ever becomes the first entrant into a particular technology sector of a market and obtains patent protection against competitors, they will almost certainly see additional growth that is not currently accounted for in the stock price
Our Final Thoughts
While Samsung’s products are well-liked in the United States, the same enthusiasm does not exist for its shares, which have a low trading volume and thus face illiquidity when traded OTC.
Aside from this issue, Samsung continues to innovate and invest in order to compete with the world’s largest technology companies.
Frequently Ask Questions
What exactly is Samsung?
Samsung is a multinational industrial corporation headquartered in South Korea.
Manufacturer of mobile phones, semiconductors, LED and LCD panels, appliances, and a variety of other products, Samsung Electronics is the largest subsidiary of the Korean conglomerate, Samsung Group.
What are the highlights of Samsung's product line?
Samsung Electronics is the world’s second-largest electronics company and the 19th largest corporation in terms of revenue, according to Forbes magazine.
The company is the world’s leading manufacturer of Android smartphones, and it will be the world’s leading manufacturer of all smartphones in 2020, according to industry estimates. Samsung is investing heavily in the development of 5G and 6G mobile technology
What is the procedure for purchasing Samsung stock?
Samsung is traded on the Korean stock exchange, the KRX. Global Depository Receipts (GDRs) are a type of security that can be purchased on the London Stock Exchange by non-US investors.
United States investors may be required to open an account with a Korean broker or purchase shares on the OTC Pink Sheet market in order to participate. It is also possible to invest indirectly in Samsung by purchasing an exchange-traded fund (ETF) that is focused on Korea.
Is there any reason to be concerned about Samsung?
Due to Samsung’s global reach and high level of diversification, the company is not exposed to risks associated with anyone market or product line.
Although the company has consistently generated profits, it has not experienced rapid growth, which may pose a threat to future growth.
It is difficult for investors in the United States to purchase Samsung stock, which may have a negative impact on the stock’s price.