1476206781_social-instagram-new-square2Mizhnarodny_Logotip_VK
Next generation investment company
Need help? Contacts
Phone: +356 2015 0555 Call us 24/7

Top 5 Russian growing stocks

Top 5 Russian growing stocks

We continue our spring series of reviews on growing stocks. Today we will talk about the Russian stocks that have seen the biggest increase in price over the past six months, from October 2017 to April 2018. Moreover, the ranking reflects the data after the recent drawdown of the Russian market.

In order to make the list, the company needed to have a market cap of at least RUB 60B* and a decent P/E ratio. All companies on the list are traded on the Moscow Stock Exchange (MOEX), and some of them are also available on the London Stock Exchange (LSE), in which case the key performance indicators are shown for both exchanges. The figures in the overview are based on the data from stock screeners msn.com and finance.google.com.

1. Organichesky Sintez PJSC (Kazanorgsintez)

One of Kazanorgsintez plants

  • Symbol: MOEX: KZOS, KZOSP
  • Market cap: RUB 164B
  • Annual turnover: N/A
  • P/E ratio: 8.8, 0.7
  • Dividend yield: 5.6%, 3.6%
  • 6-month price change: +24%, +65%

Description. One of Russia’s largest chemical companies and the country’s largest polyethylene producer, founded in 1963. The company engages in the production and marketing of chemical products and derivatives thereof. Its products include ethylene, polyethylene of low and high density, ethylene oxide, phenol-acetone, and polyethylene pipes. Kazanorgsintez produces more than 1 million tons of these products annually.

Chart. The company has the best share price performance in our review: in five years, the stock has risen in price 17 times, with most of the increase having occurred in 2015–2018. As in the case with most companies in our review, KZOS share price hit an all-time high in 2018.

Pros. Continued share price rally, moderate P/E ratio, decent dividend payout.

Cons. No significant disadvantages were found.

2. Tatneft PJSC

A Tatneft filling station in Moscow

  • Symbols: MOEX: TATN, TATNP; LSE: ATAD
  • Market cap: RUB 1.5T
  • Annual turnover: RUB 312B
  • P/E ratio: 12.0, 7.6
  • Dividend yield: 8.5%, 13.3%
  • 6-month price change: +52%, +38%

Description. The fifth oil and gas producer in Russia in terms of output, established in 1950 by the merger of several local oil companies and related industries. The company explores for, produces, refines, and markets crude oil. Tatneft also operates a chain of retail gasoline filling stations, produces and sells petrochemical products, and provides banking services (through its subsidiaries Bank Zenit and Bank Devon-Credit). In total, the Tatneft group includes about 60 institutions of various purposes. The company has branches in Libya, Ukraine, and Turkmenistan.

Chart (TATN). Since 2014, the company’s shares have been growing steadily, with growth rate being particularly high in the past six months. In 2018, Tatneft’s share price reached its historic high.

Pros. Huge dividend payout (TATNP), long-term share price uptrend.

Cons. No significant disadvantages were found.

3. Moscow City Telephone Network PJSC

Company’s egg-like logo

  • Symbols: MOEX: MGTS, MGTSP
  • Market cap: RUB 171B
  • Annual turnover: RUB 20B
  • P/E ratio: 11.9, 9.4
  • Dividend yield: 12.9%, 13.2%
  • 6-month price change: +44%, +53%

Description. Russia’s oldest telecommunications company, founded in 1882, when the Bell Telephone Company built a manually operated exchange in Moscow with a capacity of 800 numbers. In 1898, the company established the country’s first long-distance telephone line between Moscow and St. Petersburg. For most of its history, MGTS relied on wired telephony, but in 2002 it started providing broadband Internet access, and in 2009, digital TV was added to its list of services. Today the company also provides mobile communication, video surveillance, and security alarm services. The total length of the company’s telephone lines in Moscow and the Moscow region is 45,000 km, which exceeds the length of the Earth’s equator. At the moment more than 90% of MGTS shares belong to another large Russian telecommunications company MTS (Mobile Telesystems).

Chart (MGTS). In 2014-2015, the stock was traded in a tight range, mostly around RUB 500. But in early 2016, MGTS entered a new growth phase, which continues to this day. MGTS shares tripled in 2 years, hitting an all-time high in 2018.

Pros. Highest dividend rate in this review (MGTSP), good share price performance over the past two years, moderate P/E ratio.

Cons. No significant disadvantages were found.

4. Gazprom Neft PJSC

An oil terminal of Gazprom Neft

  • Symbols: MOEX: SIBN; LSE: GAZ
  • Market cap: RUB 1.4T
  • Annual turnover: RUB 844B
  • P/E ratio: 5.5
  • Dividend yield: 6.9%
  • 6-month price change: +31%

Description. The fourth largest oil producer in Russia, created in 1995 under the name Sibneft. In 1996 and 1997, Sibneft was privatized through a series of loans-for-shares auctions, but in September 2005, Gazprom bought 75.7% of Sibneft’s shares, renaming the company as Gazprom Neft. Currently, the company remains a subsidiary of Gazprom, which owns about 96% of its shares. Gazprom Neft leads the industry in a number of key economic indicators, including return on invested capital. It is the first company to start oil production on Russia’s Arctic Continental Shelf.

Chart (SIBN). Since mid-2013, Gazprom Neft shares have risen in price by 2.5 times. In 2016, the stock entered a new growth phase, which continues to this day. As in the case of the above-mentioned companies, Gazprom Neft’s share price reached an all-time high in 2018.

Pros. Long-term share price uptrend, high dividend, low P/E ratio.

Cons. No significant disadvantages were found.

5. Lukoil PAO

A safety helmet branded with a Lukoil logo

  • Symbol: MOEX: LKOH; LSE: LKOD
  • Market cap: RUB 3.4T
  • Annual turnover: RUB 2.7T
  • P/E ratio: 6.8
  • Dividend yield: 10.0%
  • 6-month price change: +31%

Description. Another top-tier Russian oil company established in 1991 as a state-owned enterprise and transformed into a private corporation in 1993. Lukoil is considered the second largest Russian company after Gazprom and the world’s third-largest private oil producer in terms of proved hydrocarbon reserves. Along with Baltika beer, Lukoil appeared among the world’s top 100 most valuable brands in 2007. Unlike many other major Russian companies, the majority of its shares are in free float.

Chart (LKOH). Since late 2014, the company’s shares demonstrate a clear positive trend, which at first was caused mainly by the devaluation of the Russian ruble (as a major exporter Lukoil receives a significant portion of its revenue in foreign currency), and then strengthened with the end of the oil crisis in 2016-2017. The stock hit an all-time high in 2018.

Pros. Long-term share price uptrend, huge dividend, moderate P/E ratio.

Cons. As in the case of Gazprom Neft, the stock has been performing so well mostly due to the ruble devaluation.

The review is based on data from www.msn.com/en-us/money/stockscreener and https://www.google.com/finance. The charts are shown for MOEX only. The companies’ market capitalization and turnover are shown in Russian rubles. The letter 'M' stands for million, 'B' – for billion.

The figures in the overview are based on the data from stock screeners msn.com and finance.google.com and are relevant as of the date of writing. The information in this text is provided to you for informational purposes only and should not be regarded as an offer or solicitation of an offer to buy or sell any investments or related services that may be referenced here.
Created by professionals. For professionals.
Nearest representative office:  1 Fore Street, London,
EC2Y 9DT, England +44 2036709945