It's easy to come up with good reasons to steer clear of Russian
equities. The Russian government has shown itself perfectly willing to
play fast and loose with the rule of law, corruption is still an endemic
problem, and the notion of shareholder rights can be pretty iffy.
Even
so, I find that some of best investment returns have come from places
where the "conventional thinking" was much too bearish, and so I think
it may be with Russia and its second-largest oil producer Lukoil (LUKOY.PK).
Although Lukoil does need to bring new fields into production to offset
declines in its Western Siberia fields, those developments are underway
and the company could surprise to the upside with long-term oil
production. With only a 3.5x multiple to 2014 EBITDA supporting a price
target 30% above today's price and a 5%+ dividend, Lukoil appears to be
meaningfully undervalued even relative to the "Russia discount".
Please read more here:
From Russia With No Love, Lukoil Trading At A Very Low Multiple
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