Responsible senior analyst at QBF Investment Management Company – Roman Kuznetsov
The Russian stock market, due to the speculative nature of most of the operations conducted on it, is underestimated in relation to global peers. Of course, country risks, which inhibit the flow of “long” money, have a significant impact on this state of affairs, however, some local stories still remain attractive to investors..
Examples can be found in almost every sector. In our opinion, the most promising stories are securities of such public companies as: Inter RAO, Polyus Gold, VTB Bank, Raspadskaya and Bashneft AP. These are the best Russian stocks at the moment, we will analyze ideas more specifically:
[Note: Stock prices and indicators in the article are indicated at the time of publication.]
1. PJSC Inter RAO (MOEX:? IRAO)
Share price: 4.01 r.
Inter is a Russian energy company. Securities have almost double growth potential, which, in our opinion, is provided by the current company policy in the field of mergers and acquisitions. Management implements a strategy of consolidation of shares among holders, which will make it possible to redeem a treasury package of securities, as a result of which their total number will be halved, i.e. profit will be distributed to fewer players.
2. PJSC Polyus Gold (MOEX:? PLZL)
Share price: 3,760.00 r.
This company is a gold producer in Russia. Her shares were under undue pressure after the introduction of the April US sanctions against Suleiman Kerimov. Investors were not confused by the fact that in 2016 he transferred control of the company to his son. We assess the growth prospects for the stocks as high, firstly, due to the closure of the sanction gep, and secondly, due to the launch of new mines in 2018 and the expansion of production volumes.
3. PJSC VTB Bank (MOEX:? VTBR)
Share price: 0.06 r.
Shares have been under pressure since the IPO. However, we believe that in 2018, against the background of a decrease in the need to form reserves, the merger of VTB 24 Bank and the ability to get rid of low-margin loans in the defense industry, the bank can report a record profit for 2018. Together with the revision of the dividend policy, this will significantly support the growth of quotations..
4. PJSC Raspadskaya (MOEX:? RASP)
Share price: 96.89 r.
One of the most attractive assets in the coal industry. In addition to the cheapness of shares relative to sector players, the company can significantly improve its financial performance in 2018 by replacing coal supplies to China and the depreciation of the ruble. The negative factor is the lack of dividend payments, but the management promised to revise the dividend policy for shareholders.
5. Bashneft PJSC (MOEX:? BANEP)
Share price: 1,749.50 r.
Preferred stocks – like Paspadskaya’s shares – are one of the cheapest assets in the oil and gas sector. Despite the fact that the company has limited production growth potential due to the OPEC agreement, investors in the securities of the corporation are attracted by the dividend story, as a constant increase in payments will be provided by the need to replace the income of the Republic of Bashkortostan and payments under the lawsuit of AFK Sistema.
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Which Russian stocks would you recommend? Can you please provide insights on the top-performing companies and their potential for growth in the Russian market?