How to Invest in Class A Stocks
Class A stocks are a special class of a company's share capital that usually offer greater voting rights than the regular, or Class B, shares. For example, the holders of Class A shares of Berkshire Hathaway, ticker symbol BRK.A on the New York Stock Exchange (NYSE), have 200 times the voting rights of the Class B shareholders.
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Instructions
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Open a brokerage account, if you do not already have one. Most commercial banks offer both full service and self-directed brokerage services.
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Review the financial statements, stock price history and details on the different classes of shares. When you invest in a stock, you are buying part of a business. You can do this research on the Internet, starting with the Investor Relations section of the company's website. Make sure that you understand what you are buying.
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Determine if the current price is within its one- to two-year trading range. You can do this by reviewing the historical chart either on the company website or by using the research tools provided by your brokerage account. Class A shares tend to be less volatile than regular shares because they are thinly traded.
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Make sure that you have enough cash or margin in your account. The amount will depend on the particular stock price.
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Place a limit order to buy or sell the shares. A limit order is filled only at your specified price or price range, and within your specified time frame. A market order is filled at the current market price and expires at the end of the trading day. For thinly traded Class A shares, a market order may be filled at the seller's asking price, which may be higher than what you are willing to pay.
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Monitor the performance of both the stock price and the underlying business fundamentals. You can monitor the price either on the Investor Relations section of the company website or in your brokerage account. You can monitor the business fundamentals by reviewing the financial statements and press releases at the Investor Relations section of the company website. Be prepared to adjust your investment strategy if business fundamentals change.
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Tips & Warnings
Most Class A shares trade on the same stock exchange as the regular shares. However, if the Class A shares are unlisted, you cannot access them from your brokerage account.
Do not confuse Class A shares with preferred shares.
Class A stocks are thinly traded, meaning they trade in low volumes. This normally means a higher bid/ask spread: the difference between the offering and the asking price. It also means that you may not be able to either buy or sell in the quantities that you would prefer.
References
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