Saturday, July 21, 2007

Invest in Russian Stocks from the US

Russia is part of BRIC (Brazil, Russia, India, and China), a very fast growing block in International Emerging Markets. Russia became the fastest growing economy in the G8 and is expected to grow about 6.4% in 2007, and grow close to 6% in 2007 and 2008. Russia possesses rich natural resources, a well educated labor force with substantial technical expertise. In addition, there are signs of poor infrastrcture and inefficient supply systems.

One way to play Russia is through the Market Vectors Russia ETF Trust (RSX). Another way is to buy individual companies as Depository Receipts through the major American stock exchanges (Nasdaq, AMEX, New York Stock Exchange-Euronext). The majority of the Russian stocks available directly through the United States appear to be Over the Counter Stocks, and stocks in the "pink sheets." There is not as much information available on them, so it becomes difficult to research them.

Many of the Russian stocks listed here are minerals, oil and gas, and telecom companies.

Russian Stocks Listed on Major American Exchanges

1. Michel Steel (MTL) -- MTL is a 6 Billion Dollar Mining and Steel Company. The produce and sell coking and steam coal concentrate, steam coal, iron ore concentrate and ferronickel that are used in the production of steel. They also produce semi-finished steel products and other metal products.

2. Mobile TeleSystems (MBT) -- Mobile TeleSystems is a 25.8 Billion Dollar company providing mobile telecom services to Russia and parts of Eastern Europe. It's forward PE is 12.29, and is expected to grow at a 5 yr rate of 10.25%

3. Rostelcom (ROS) -- Rostelcom is a 7 Billion Dollar company providing long distance and international telecom services.

4. Golden Telecom (GLDN) -- Golden Telecom is a 2.44 Billion Dollar company that provides internet and telecom services to Russia and parts of Eastern Europe. It has a forward PE of 18.63, and is expected to grow by 15.5% (5 year estimate), for a PEG of 1.20.

5. Vimpel Communications (VIP) -- Vimpel is a 22.9 Billion Dollar telecom company that focuses on wireless telecommunication services in Russia and parts of Eastern Europe. It has a forward PE of 14.45, and an estimate 5 year growth rate of 24.11%, for a PEG of 0.60, a very good value.

6. Wimm Bill Dann (WBD) -- Wimm Bill Dann is a 4.45 Billion Dollar Russian dairy, juice, and food company. It has a forward PE of 21.88, but its 5 year estimate growth rate is 35%, for a PEG of 0.62, another very good value.

7. CTC Media (CTCM) operates television networks that offer entertainment programming in Russia.

The Other Over-The-Counter Stocks

There isn't as much information on the other Russian stocks that trade as "pink sheets." Among these, Lukoil (LUKOY.PK), Gazprom (OGZPY.PK), and Surgutneftegaz (SGTZY.PK) are often mentioned as some of the largest oil and gas companies in Russia. 51% of the Russian Market is in Oil and Gas.

Aside from Oil and Gas, Russian telecom companies seem to be popular Russian stocks that trade OTC.

Norilsk Nickel (NILSY.PK) is also the world's top producer of Nickel.

7. Bashinformsvyaz (BHFZY.PK)

8. Buryatzoloto (BYZJY.PK)

9. Central Telecommunications (CRMUY.PK)

10. Concern (CCKLY.PK)

11. Far East Telecom (FEEOY.PK)

12. Gazprom (OGZPY.PK)

13. Gazprom Neft (GZPFY.PK)

14. GUM (Torgovy Dom) (GUMRY.PK)


16. Irkutskenergo (IKSGY.PK)

17. Kuzbassenergo (KZBGY.PK)

18. Lukoil (LUKOY.PK)

19. Moscow City Telephone Networks (MWCTY.PK)

20. Mosenergo (AOMOY.PK)

21. Norilsk Nickel (NILSY.PK)

22. North-West Telecom (NWTEY.PK)

23. Polyus Gold (OPYGY.PK)

24. RBS Information Systems (RINFY.PK)

25. Rosneftegazstroy (RNGZY.PK)

26. Rostevenergo (RTVPY.PK)

27. Samaraenergo (STBWY.PK)

28. Sibirtelecom (SBTLY.PK)

29. Southern Telecom (STJSY.PK)

30. Surgutnetftegaz (SGTZY.PK)

31. Tatneft (TNTTY.PK)


33. Unified Energy Systems (USERY.PK)

34. Uralsvyazinform (UVYPY.PK)

35. Utair (UTARY.PK)

36. Volga Telecom (VLGAY.PK)

37. Yukos (YUKOY.PK)

Among these

Among all these companies, telecom company Vimpel Communications (VIP) and Wimm Bill Dann (WBD) look the most interesting from a growth at a reasonable price metric. Norilsk Nickel (NILSY.PK), Lukoil (LUKOY.PK), and Gazprom (OGZPY.PK) may be good options too if you can find enough information on them. The other Nasdaq/NYSE/AMEX stocks, such as MTL, may be worth investing too. Please do your due diligence in researching stocks.

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