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Does the price of Gazprom stock has a direct correlation with North Stream 2 project?
Hi fellows,
What would your opinion be about Gazprom shares? Doest it carry much of political risk and has too much correlation with North Strem-2 project?
Thanks in advance,
Andrew
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2 comments
The political risk for Gazprom is the Government ownership. The NS2 project is not the main event. Gazprom is very cheap on a PER basis because earnings have not traditionally been paid to shareholders. Noted they increased the dividend recently. Also the international oil price is on downward pressure. I think to own Gazprom you need a view on:
1. long term oil price
2. Potential (or not) for earnings to be paid to private shareholders
3. role of the government in Gazprom
Good luck
hi Andrew, by the nature of it being a Russian company, it does of course carry a political risk. nothing new there but the reason for the stock having rocketed in the last 2 months is that at last the management( which by the way has seen a lot of changes ) has finally accepted to increase the dividend to the norm in Russian cos wth stateownereship: 50% of IFRS results . for a company with traditionally very poor asset allocation this is mega news since the less cash they have , the less value distructiv investments they are able to a make. Simples!!