Don’t Let The Ukraine Crisis Go To Waste: Buy These 3 Stocks Instead


I like this.


An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.

By StreetAuthority,

Rodney Dangerfield said it best in the movie ” Caddyshack” when he was talking to his broker while playing golf.

#-ad_banner-#”Buy, buy, buy! Oh, everyone’s buying? Then sell, sell, sell!”

The quick lesson from this is many times it is best to not follow the crowd. Instead, do the opposite — and history shows that times of crisis have proven to be some of the best times to invest.

Right now, the market everyone is selling is Russia, driven by its incursions in Ukraine. Some of the hardest-hit stocks include VimpelCom (Nasdaq: VIP ) , Yandex (Nasdaq: YNDX ) and Gazprom ( OGZPY ) .

VimpelCom is down 36% year to date. Yandex is down 24% and Gazprom is down almost 5%. Are they worth buying on this pullback? Let’s take a closer look

The Best Russian Telecom To Own
VimpelCom is a leading telecom in Russia, Ukraine and many other parts of the former Soviet Union. In Russia, VimpelCom owns the #3 carrier, and in Ukraine, it owns the largest, Kyivstar. In total, the company has more than 218 million mobile subscribers.

Over the last four years, VimpelCom has sought to lessen its reliance on Russia as it expanded into Europe, Asia and Africa. In Italy, the company owns Wind, the second-largest fixed-line operator and the third-largest mobile carrier.

VimpelCom benefits by having long-term investors behind the company. Its two largest shareholders are billionaire Mikhail Fridman’s Alpha Group and Norwegian telecom giant Telenor ( TELNY ).

For investors, shares of VIP have entered deep-value territory. VimpelCom is trading at only 8.8 times next year’s earnings and an enterprise value-to-EBITDA (earnings before interest, taxes, depreciation and amortization) ratio of only 3.8. Its price/earnings-to-growth ( PEG ) ratio is only 0.3. It’s also paying a dividend yield of 10.8% right now.

The Best Russian Internet Stock To Own
When most investors think of search engines, Google (Nasdaq: GOOG ) comes to mind — but n Internet-savvy Russia, Yandex accounts for 60% of all online searches. In fact, Yandex is a diversified Internet company that operates the world’s fourth-largest search engine. is the most popular home page in Russia and has a strong presence in Ukraine and the other former Soviet republics.

Yandex is also a well-run company. It has an operating margin of 30% and a return on equity of 32%. Compare that with Google’s operating margin of 23% and return on equity of 14%.

For investors, Yandex has also become the cheapest search engine to own. Shares are trading at only 22 times earnings and have a PEG ratio of only 0.8. Compare this with Google, which trades at nearly 30 times earnings.

The Best Russian Supermajor To Own
Gazprom is the world’s largest producer of natural gas. The Russian government is the majority owner, and the European Continent relies on the company for the bulk of its gas supplies. Gazprom also has the largest network of gas pipelines in the world.

Since the Russian government controls Gazprom, it has kept many investors from buying shares. Gazprom has been at the center of many of its disputes with Ukraine. Currently, Ukraine owes Gazprom about $3.5 billion, and President Vladimir Putin is insisting on payment — or exports will be cut off to Ukraine.

The use of Gazprom as a political tool has made the company incredibly cheap. Shares are trading at only 2.9 times next year’s earnings and an enterprise value-to-EBITDA ratio of 2.0.
This compares favorably with Exxon Mobil (NYSE: XOM ) , which trades at 13.2 times next year’s earnings and an EV-to-EBITDA multiple of 7.

Risks to Consider: All three companies have significant exposure to Russia and Ukraine. If the crisis persists for many years, it could depress returns longer than expected. For investors, it is best to take a long-term approach when investing in companies with exposure to Russia and Ukraine.

Action to take –> Once the situation stabilizes, shares of VPI should return to where they were at the start of the year. This would put shares trading around $12 for upside of 50%. Buy shares of Yandex with a price target of $38 for upside of over 20%. This would put shares trading at the same valuation as Google. Buy shares of Gazprom with a $16 price target for 100% upside. This would still put shares trading at only about 6 times next year’s earnings, which is still less than half of Exxon Mobil’s earnings multiple for next year.

Tags: , , , , , , , , , , , , , , , , , ,

Post a Comment

Your email is never published nor shared. Required fields are marked *


Subscribe without commenting