Does the price of Gazprom stock has a direct correlation with North Stream 2 project?

Sunday, Jul 28 2019 by

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,

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2 Posts on this Thread show/hide all

danieles 11th Aug 1 of 2

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!!

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jwebster 12th Aug 2 of 2

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

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