Guide to Analysing Companies

Tracking stock
A class of share that pays a dividend based on the perform-
ance of a particular division or subsidiary of a larger company;
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also sometimes known as targeted stock or letter stock (because
they often carry the name of the parent company, for example,
General Motors H). A tracking stock is usually issued by a large
conglomerate when it feels that the value of a small offspring is
not being fully appreciated by the market. The offspring may be
a high-tech subsidiary in a different but complementary busi-
ness. Shareholders of most tracking stocks have little or no claim
to the assets of the parent company, should it be liquidated or
wound up.
Tranche
Part of a loan doled out by the lender bit by bit to the bor-
rower. Tranche most commonly refers to the chunks in which
the international monetary fund hands out its loans to
member countries. Release of an imf tranche usually depends
on a borrower making pre-ordained changes to its economy.
Transferable credit
A trade credit in which an importer opens a letter of credit
in favour of an agent (or middleman) who then has it trans-
ferred to the exporter. This allows the agent to be the importer
without putting up the capital necessary to fund the deal. It
also enables the agent to keep the identities of the importer and
exporter hidden from each other.
Transfer agent
A body which transfers securities from one owner to
another on behalf of the company that has issued them. In the
United States, a transfer agent also keeps a record of a
company’s shareholders.
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TRANSFER AGENT
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