Dear Reader,
Here I am going to attempt to value Gazprom, the Russian natural gas and oil supplier. Gazprom is currently valued at approximately 70 billion USD by the Russian stock market. Gazprom trades at a very low Price/Earnings ratio of 3.8 and provides 4.52% dividend yield.
Basically, Gazprom is grossly undervalued. I estimate Gazprom is worth around 170 billion USD with a 5-7 years time horizon. Even in the current low oil price environment. Oil and natural gas are essential for the functioning of the global economy. The prices of oil and natural gas will not remain low for long. On this blog
I correctly forecasted that oil prices will recover to around 40 USD. Then I assumed this would be a temporary recovery before the economy lapses into a recession again.
Now I must admit the chances that oil prices could rise more and stay higher than current levels are increasing.
All that said, Gazprom seems very undervalued as do the stock markets of both Russia and China. Actually many emerging market large companies provide very attractive dividend yields at very low Price/ Earnings ratios. One has to bear in mind, though, that there is a serious risk that major emerging markets currencies in which the aforementioned stocks are denominated could loose a lot of value towards the USD. If, however, the contrary happens and the Russian Ruble appreciates relative to the USD this would make Gazprom even more undervalued.
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or sell any securities. The opinions expressed on the blog are Petar
Posledovich's. Petar Posledovich does not
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networks. The information presented is "as is".
Petar Vladimirov
Posledovich is not liable for any investment losses incurred by reading and
interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may
possess some of the securities, currencies or their derivatives mentioned in
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Respectfully yours,
Petar Posledovich
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