Company changes in Compustat North America

Recently I found out that it can be difficult to work using historical lists of tickers for companies when you do not use the tickers from the database itself. The example I used to find out how Compustat deals with changes in companies was the former S&P 500 company Fortune Brands: “Fortune Brands (NYSE: FO) was a holding company founded in 1969 as American Brands and later renamed in 1997 and split apart in 2011. The corporate headquarters was in Deerfield, Illinois in the United States. On October 3, 2011, it split into two publicly traded companies: Fortune Brands Home & Security (NYSE: FBHS) and Beam Inc. (NYSE: BEAM). Fortune Brands Home & Security, Inc is engaged in home and security products. Beam Inc is a premium spirits company that makes and sells branded distilled spirits products.”

If you look up the three companies the result is as follows. Compustat North America Fundamentals Annual/Security Daily, using the Code Lookup tool at step 2 (in WRDS):

Can be found through Code lookup:

  • Name: Fortune Brands Inc
    Ticker: FO
    GVKEY: 001408
    CIK: 0000789073
    CUSIP: 349631101
  • Name: Fortune Brands Inc
    GVKEY: 001408
    CIK: 0000789073
    CUSIP: 349631200
    Ticker: FO.PA

Cannot be found using code lookup:

  • Name: BEAM Inc
    Ticker: BEAM
    GVKEY: 001408
    CUSIP: 073730103
    CIK: 0000789073
  • Name: Fortune Brands Home & Security Inc
    Ticker: FBHS
    GVKEY: 188255
    CUSIP: 34964C106
    CIK: 0001519751

Searches by Tickers will give the following result in the Compustat North America Fundamentals Annual database & Security Daily databases:

  • FO and FO.PA will give no results
  • BEAM, BEAM.PA and FBHS will give you results/output.

If you check the Index Constituents for the S&P 500 composition you will find the following codes:

  • Name: S&P 500 Comp-Ltd
    GVKEYX: 000003
    TIC: I0003

When you use the codes to get the historical composition the older ticker FO for Fortune Brands is no longer there. The new ticker BEAM, however, appears to have replaced the FO ticker to allow people to get a continuous series of data (annual reports data or Security data). I do not really agree with this method because, in my view, it does do justice to the fact that the original company has changed very much and cannot be considered to be the new company. Regardless of my personal feelings about this, it is probably best to use the Constituent Index database of Compustat to get the historical composition as it has the most current Tickers. Individual code lookup searches can not always be trusted as the original company: Fortune Brands can still be found, but not the new company BEAM.

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