Russian stock report - Gazprom
Gazprom increases, 2 days' volume in a day April 20, 2018 18:00 SAMT
NEWS BITES - BRIC
Gazprom (MICEX:GAZP), Russia's 2nd largest Oil & gas company by market cap, has increased 71.0 Kopeck (0.5%) from its last trading session of April 19 to close at RUB143.59. Compared with the MOEX Russia Index which rose 2.3 points (0.1%) in the day, the relative price increase was 0.4%. The rise has been propped up by high volume of 2.3 times the average daily volume of 8.5 million shares.
Gazprom is good value by Price/Sales despite 11% price rise
Gazprom (MICEX:GAZP), climbed RUB13.66 (or 10.5%) year-to-date (YTD) in 2018 to close at RUB143.59. The stock is trading at a Price/Sales multiple of 0.6. The Price/Sales is 0.8 times the sector average of 0.7; and is the 9th lowest in the Oil & Gas sector.
Highlights in today's Report:
SECTION 1 BULLISH SIGNALS
Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators
SECTION 2 BEARISH SIGNALS
Fundamentals, Overvaluation [compared with sector average], Technicals, Low Performance Indicator, Moving Annual Return, Beta & Alpha, Aggregate Volumes, Prices and Turnover Period
SECTION 3 RANKING
Global, Independent Ratings
SECTION 4 FINANCIALS
Financials Summary, Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-
SECTION 5 PROFILE
Activities, Industry & Sector, Top Management, Issued Capital
SECTION 6 STOCK BUZZ
SECTION 1 GAZPROM BULLISH SIGNALS
+ The P/E of 3.4 multiplied by the P/NTA of 0.3 is 1.0. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.2. Compared with the rest of the market the stock is undervalued.
+ Total Liabilities/EBITDA of 3 is comfortably below the Joseph Piotroski benchmark of 5.
+ The company is cash rich with Cash to Market Capitalisation at 26.7%.
+ Net profit margin has averaged 10.8% in the last 3 years. This is better than the sector average of 8.3% and suggests a high margin of safety.
+ Brandirectory have estimated Gazprom brand value at RUB506.9 billion (US$8.3 billion). The Brand Value represents an impressive 9.5% of the estimated Enterprise Value of RUB5,332.2 billion (US$87.4 billion).
1.2 Undervaluation [compared with sector average]:
+ Price/Earnings of 3.4 [6.7].
+ Price/Sales of 0.6 [0.7]. We estimate Gazprom stock is trading at a current year Price/Sales of 0.5 and a forward year Price/Sales of 0.5.
+ Price to Book of 0.3 [0.8]. We estimate Gazprom stock is trading at a current year Price to Book of 0.3 and a forward year Price to Book of 0.3.
+ Price to EBITDA of 1.9 [4.2].
+ The price increased 0.4% in the last week and 0.8% in the last month.
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 142.41 minus the 26-day EMA of 141.78 is positive 0.63 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.
+ Rises to Falls: in the past month the number of rises outnumbered falls 15:9 or 1.7:1.
+ The 5.3% discount to 12-month high of RUB151.65 against the 28.8% premium to 12-month low of RUB111.46 suggests the stock continues to push for new highs.
+ The present value of RUB1,000 (PV1000) invested one year ago in Gazprom is RUB1,177, for a capital gain of RUB177.
|MOEX Russia Index||1,022||979||1,152|
+ The present value of RUB1,000 (PV1000) invested ten years ago in Gazprom is RUB10,660, for a capital gain of RUB9,660.
+ 10 years Multiplier in RUB = 10.66x
+ Compound Annual Growth Rate (CAGR) in RUB = 26.7%
Present Value of USD1,000 invested 10 years ago:
+ The present value of USD1,000 (PV1000) invested ten years ago in Gazprom is $US4,104, for a capital gain of $US3,104.
+ 10 years ago USD 1 equalled RUB 23.4742
+ 10 years Multiplier in USD = 4.104x
+ Compound Annual Growth Rate (CAGR) in USD = 15.2%
Apr 20, 2018: USD 1 equals RUB 60.98
1.4 High Performance Indicators:
|Description||Value||Rank In Market|
|Today's Turnover||RUB2.8 billion (US$45.5 million)||In Top 2%|
|P/E * P/NTA||1.02||In Top 2%|
|Earnings Yield %||29.4||In Top Quartile|
|Price/MAP200||1.04||In Top Quartile|
|EBITDA Margin %||29.9||In Top Quartile|
|Cash to MCap %||26.7||In Top Quartile|
|Price/MAP50||0.98||In Top Quartile|
|Total Debt to Equity||0.2||In Top Quartile|
SECTION 2 GAZPROM BEARISH SIGNALS
+ As per the Du Pont analysis, Return on Equity of 9.1% is lower than sector average of 10.0%. This is computed as net profit margin of 16.3% times asset turnover [sales/assets] of 0.36 times leverage factor [total assets/shareholders' equity] of 1.5.
2.2 Overvaluation [compared with sector average]:
+ Return on Equity 9.1% [10.5%].
+ The stock is overbought according to the Williams % R indicator of -17.6, suggesting the price is close to its 14-day high of RUB146.89.
2.4 Low Performance Indicator:
|Description||Value||Rank In Market|
|EPS Growth %||23||In Bottom Quartile|
2.5 Moving Annual Return
Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in GAZP would have produced a return of 17.7%.
|GAZP||Close (RUB)||Annual Return %|
|1 Yr ago||121.99||(21.5)|
|2 Yrs ago||155.38||2.9|
|3 Yrs ago||150.96||12.7|
|4 Yrs ago||133.9||11.5|
Close 5 years ago RUB120.11
2.6 Beta & Alpha:
+ Beta: the Beta of Gazprom stock is 1.2. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.
+ Alpha: the Alpha of the stock is 1.5. The actual return of 14.45% exceeded the expected return of 12.9%, reflecting outperformance.
2.7 Aggregate Volumes, Prices and Turnover Period:
[Volume Index or VI in brackets; 1 is average]
+ Micex: GAZP.MICEX 19,318,050 [VI of 0.6] volume 97.2% of aggregate. Price: RUB143.59.
+ Frankfurt: GAZ.FRA 557,440 [VI of 0.01] volume 2.8% of aggregate. Price: EUR3.78. Using the current exchange rate of EUR1 equals 75.2497RUB, The shares are at a 98.1% premium to the close price on Micex.
+ Aggregate volume: there were 19.9 million shares of Gazprom worth RUB2.9 billion traded today. The aggregate volume was 0.2 times average trading of 79.9 million shares.
The turnover rate in the 12 months to date was 29.1% (or a turnover period of 3 years 5 months). This average length of ownership of the stock at 0.9 times the average holding period of 3 years 10 months for stocks in the MOEX Russia Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.
SECTION 3 RANKING
3.1 Global Rank [out of 47,666 stocks] and Rank in the Europe Region [out of 8,559 stocks]
|Description||Value||Global Rank||In Eur Region|
|Total Assets (US$)||295.5B||271||69|
|Net Profit (US$)||16.6B||32||3|
|Return on Equity %||9.1||14,805||2,722|
|Net Profit Margin %||16.3||7,247||1,259|
|Price to Book||0.3||2,019||427|
|PV$1000 (1Year) US$*||1,084||19,263||3,293|
|US$* Change (1Year) %||10.1||17,827||3,978|
* 1 year ago USD 1 = RUB 56.5
Apr 20, 2018: USD 1 equals RUB 60.98
3.2 Independent Ratings
+ IHS Energy 50:
Gazprom was ranked 8 in IHS Energy's list of Top 50 Energy Companies 2013; an improvement over a year from rank 9 in 2012.
+ Platts 250:
It is the largest company in the Platts Top 250 Global Energy Company Rankings.
+ FT 500:
It is the 43rd largest by revenue in the FT Global 500.
+ Fortune 500:
It was ranked 63 by total revenues in the Fortune 500 annual list for 2017; a deterioration over a year from rank 56 in 2016.
+ Newsweek 500:
It was ranked 331 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 4.4% in Carbon productivity, 1.8% in Waste productivity and 1% in Water productivity.
+ Brand Finance 500:
It was ranked 180 in the Brand Finance list of the world's 500 Valuable Banking brands by brand value in 2015; a deterioration over a year from rank 147 in 2014. Brand Finance valued the brand at US$868 million.
+ Industryweek 1000:
It is a new entrant in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2016, ranked 35.
+ Forbes 2000:
It is the 19th largest by revenue in the Forbes Global 2000.
+ BSS/News Bites:
It is placed 55/166 in BSS News Bites' ranking of Russian performers in the past year, a percentile ranking of 67.
+ Vanguard Total World Stock ETF 7517:
The stock was one of 7517 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 66,690 shares in the period Nov 30, 2017 to Jan 31, 2018 worth $US9,684,635 at an estimated Volume Weighted Average Price (VWAP) of $US145.2187. As at Jan 31, 2018, the Vanguard Total World Stock ETF held 639,861 shares worth $US1,650,255 or 0.01% by value of the ETF's portfolio [Ranked 1518 out of 7517 by value and 4 out of 34 for Russia].
SECTION 4 GAZPROM FINANCIALS
4.1 Financials Summary
|Year ended||Dec 2016||Dec 2015||Dec 2014|
|Sales (USD B)||105.2||104.6||103.3|
|Pretax (USD B)||22.1||15.9||5.3|
|Net (USD B)||16.4||13.5||2.7|
Net profit was up 20.9% from US$13.5 billion in 2015 to US$16.4 billion in 2016. Earnings Per Share (EPS) was up 23% from RUB34.29 to RUB42.19.
4.2 Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-
+ Net profit up 20.9% from RUB787.1b ($US10.7b) to RUB951.6b ($US15.5b)
+ EPS up 23% from RUB34.29 (US46.76c) to RUB42.19 (US68.89c).
+ Profit before tax to Sales up from 15.2% to 21%.
+ Interest revenue to Sales up from 16.3% to 16.7%.
+ Interest expenses to Sales down from 23.2% to 8.9%.
+ Debt to Equity down 21.9% from 0.3 to 0.2.
+ Total liabilities to Total assets down 11.1% from 0.4 to 0.3.
+ Retained earnings to total assets up from 60.8% to 65.0%.
+ Total non-current assets to Total Assets up from 76.6% to 80.9%.
+ Fixed Assets to Total Assets up from 64.5% to 68%.
+ Non-current debtors to Total Assets up from 3.5% to 4.2%.
+ Total Liabilities to EBITDA of 3.0 compares favourably with the Joseph Piotroski benchmark of <5. However, it has deteriorated by 14.1% from the previous year's ratio of 2.6.
+ Total Liabilities to Operating Cash Flow of 3.5 compares favourably with the Joseph Piotroski benchmark of <4. However, it has deteriorated by 15.6% from the previous year's ratio of 3.0.
+ EBIT Margin down from 38.4% to 29.9%.
+ EBIT to total assets down from 13.7% to 10.8%.
+ Current ratio down 10.6% from 1.9 to 1.7.
+ Working capital to total assets down from 11.0% to 7.8%.
+ Total current assets to Total Assets down from 23.4% to 19.1%.
+ Cash to Total Assets down from 8% to 5.3%.
+ Total revenue to total assets steady at 0.4.
+ Tax expenses to Sales up from 2% to 4.7%.
SECTION 5 GAZPROM PROFILE
Gazprom is a gas company basically focused on geoIogical expIoration, production, transmission, storage, processing and marketing of gas and other hydrocarbons.
5.2 Industry & Sector
|Classification Level||Name of Sector|
|Business Sector||Energy - Fossil Fuels|
|Industry Group||Oil & Gas|
5.3 Top Management
The chairman is Viktor Zubkov.
5.4 Issued Capital
Based on 23,673,510,000 issued shares the market capitalisation is RUB3,399.3 billion (US$55.7 billion).
SECTION 6 STOCK BUZZ
To view Recent Company Headlines, click here
May 12 2017: Gazprom announces AGM
Gazprom has announced its Annual General Meeting will take place on Friday, June 30.
Physical Address: 16 Nametkina St., 117997, Moscow, V-420, GSP-7
Exchange: Moscow Exchange (MICEX)
M:GAZP; MCX:GAZP; MM:GAZP; RM:GAZP; GAZP.MM