Russian stock report - Gazprom

RUSS

Gazprom in 4th consecutive rise, nears a 17-month high January 19, 2018 18:00 SAMT

NEWS BITES - BRIC

Gazprom (MICEX:GAZP), Russia's largest Oil & gas company by market cap, extended its gains on Friday, rising an additional 12.0 Kopeck (0.1%) to trade at RUB149.97. The stock lifted 2.3% on Wednesday and 0.9% on Thursday. This brought its 4-day rise to 5.0%, compared with the MOEX Russia Index which rose 27.8 points (1.2%) in the four days for a relative price increase of 3.8%. The 4-day rise was fuelled by a cumulative volume of 5.7 times the average 4-day volume of 8 million shares. The stock is now approaching its 353-day high of RUB151.0.

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 Indicators, A negative finish to 2017

SECTION 3 PRICE VOLUME DYNAMICS

Present Value of RUB1000 invested in the past, Moving Annual Return, Beta & Alpha, Aggregate Volumes, Prices and Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

SECTION 6 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 7 STOCK BUZZ

SECTION 1 GAZPROM BULLISH SIGNALS

1.1 Fundamentals:

+ The P/E of 3.5 multiplied by the P/NTA of 0.3 is 1.1. 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 25.6%.

+ Net profit margin has averaged 10.8% in the last 3 years. This is better than the sector average of 8.9% and suggests a high margin of safety.

+ Brandirectory have estimated Gazprom brand value at RUB469.4 billion (US$8.3 billion). The Brand Value represents an impressive 8.6% of the estimated Enterprise Value of RUB5,483.2 billion (US$97.1 billion).

1.2 Undervaluation [compared with sector average]:

+ Price/Earnings of 3.5 [4.7].

+ Price/Sales of 0.6 [0.8]. We estimate Gazprom stock is trading at a current year Price/Sales of 0.6 and a forward year Price/Sales of 0.5.

+ Price to Book of 0.3 [0.5]. 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 [2.7].

1.3 Technicals:

+ The price climbed 4.4% in the last week and soared 12.0% in the last month.

+ Compared with the MOEX Russia Index which rose 1.2% for the week and 8.0% for the month, this represented a relative price increase for Gazprom stock of 3.1% for the week and 4.0% for the month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 143.43 minus the 26-day EMA of 139.57 is positive 3.85 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ The 3.0% discount to 12-month high of RUB154.53 against the 34.5% 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 ten years ago in Gazprom is RUB11,150, for a capital gain of RUB10,150.

+ 10 years Multiplier in RUB = 11.15x

+ Compound Annual Growth Rate (CAGR) in RUB = 27.3%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Gazprom is $US4,828, for a capital gain of $US3,828.

+ 10 years ago USD 1 equalled RUB 24.4499

+ 10 years Multiplier in USD = 4.828x

+ Compound Annual Growth Rate (CAGR) in USD = 17.1%

Jan 19, 2018: USD 1 equals RUB 56.46

1.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverRUB5.4 billion (US$95.6 million)In Top 2%
P/E * P/NTA1.1In Top 5%
Price/MAP501.11In Top 6%
Earnings Yield %28.1In Top Quartile
Price/MAP2001.14In Top Quartile
Cash to MCap %25.6In Top Quartile

SECTION 2 GAZPROM BEARISH SIGNALS

2.1 Fundamentals:

+ 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 Assets 5.9% [6.8%].

+ Return on Capital Employed 12.2% [13.6%].

2.3 Technicals:

Overbought/Bearish/Resistance Signals:

+ The Relative Strength Index (RSI) of 88.6 has penetrated the overbought line of 70, suggesting the price gain of 15% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -4.7, suggesting the price is close to its 14-day high of RUB151.0.

+ The Money Flow Index [MFI] is 86.4 suggesting an overbought 14-day trend, being above 80. The Money Ratio of 6.4 suggests positive money flow was 6.4 times negative money flow.

+ The Stochastic indicator of 95.4 has broken through the overbought line of 80; this indicates the price is close to its 14-day high and is likely to revert to a downtrend.

2.4 Low Performance Indicators:

DescriptionValueRank In Market
Return on Capital Employed [ROCE] %12.2In Bottom Quartile
EPS Growth %23In Bottom Quartile

2.5 A negative finish to 2017

The stock has sunk RUB24.34 (or 15.8%) in FY 2017 to close at RUB129.93. The volume in FY 2017 equalled average trading of 26.3 million shares in the previous year.

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Present Value of RUB1000 invested in the past:

+ The present value of RUB1,000 (PV1000) invested one year ago in Gazprom is RUB994, for a capital loss of RUB6.

PV10001-week1-month1-year
GAZP.MICEX1,0441,120994
MOEX Russia Index1,0121,0911,059

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 2 out of 5 years.

GAZPClose (RUB)Annual Return %
Jan 19149.97(0.6)
1 Yr ago150.8520.8
2 Yrs ago124.83(16.7)
3 Yrs ago149.929.3
4 Yrs ago137.2(7.6)

Close 5 years ago RUB148.42

3.3 Beta & Alpha:

+ Beta: the Beta of Gazprom stock is 1.1. 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 -9.3. The actual return of -8.34% fell short of the expected return of 1.0%, reflecting underperformance.

3.4 Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ Frankfurt: GAZ.FRA 129,180,199 [VI of 3.3] volume 78.2% of aggregate. Price: EUR4.29.

+ Micex: GAZP.MICEX 36,002,100 [VI of 1.1] volume 21.8% of aggregate. Price: RUB149.97.

+ Aggregate volume: there were 165.2 million shares of Gazprom worth RUB43.7 billion traded today. The aggregate volume was 2.3 times average trading of 71.5 million shares.

The turnover rate in the 12 months to date was 27.5% (or a turnover period of 3 years 7 months). This average length of ownership of the stock at 0.8 times the average holding period of 4 years 6 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 4 RANKING

4.1 Global Rank [out of 47,420 stocks] and Rank in the Europe Region [out of 8,522 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)62.9B20259
Total Assets (US$)297.7B26868
Revenue (US$)107.5B6321
Net Profit (US$)16.7B261
Return on Equity %9.114,6562,693
Net Profit Margin %16.37,1651,246
Price to Book0.31,901449
Price/Earnings3.5845231
PV$1000 (1Year) US$*1,04825,5555,023
US$* Change (1Year) %2.524,8554,923

* 1 year ago USD 1 = RUB 59.52

Jan 19, 2018: USD 1 equals RUB 56.46

4.2 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 76/184 in BSS News Bites' ranking of Russian performers in the past year, a percentile ranking of 59.

+ Vanguard Total World Stock ETF 7457:

The stock was one of 7457 global stocks selected by Vanguard Total World Stock ETF (VT). As at November 30, 2017, the Vanguard Total World Stock ETF held 573,171 shares worth $US1,285,689 or 0.01% by value of the ETF's portfolio [Ranked 1670 out of 7457 by value and 6 out of 33 for Russia].

SECTION 5 GAZPROM FINANCIALS

Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)108107.4106.1
Pretax (USD B)22.716.45.4
Net (USD B)16.813.92.8
EPS (RUB)42.1934.296.93

Net profit was up 20.9% from US$13.9 billion in 2015 to US$16.8 billion in 2016. Earnings Per Share (EPS) was up 23% from RUB34.29 to RUB42.19.

SECTION 6 GAZPROM PROFILE

6.1 Activities

Gazprom is a gas company basically focused on geoIogical expIoration, production, transmission, storage, processing and marketing of gas and other hydrocarbons.

6.2 Industry & Sector

Classification LevelName of Sector
Economic SectorEnergy
Business SectorEnergy - Fossil Fuels
Industry GroupOil & Gas

6.3 Top Management

The chairman is Viktor Zubkov.

6.4 Issued Capital

Based on 23,673,510,000 issued shares the market capitalisation is RUB3,550.3 billion (US$62.9 billion).

SECTION 7 STOCK BUZZ

Corporate Wire

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.

April 06 2017: Alexey Miller: first medium-term contract signed for Uzbek gas to be purchased by Gazprom

A number of documents were signed today in Moscow with the purpose of advancing Russian-Uzbek cooperation in the gas sector. The signing ceremony took place in the presence of Vladimir Putin, President of the Russian Federation, and Shavkat Mirziyoev, President of the Republic of Uzbekistan.

Alexey Miller, Chairman of the Gazprom Management Committee, and Gulomzhon Ibragimov, Deputy Prime Minister of the Republic of Uzbekistan, inked a contract for Uzbek gas to be purchased by Gazprom.

April 04 2017: Gazprom: China's СРЕСС to take part in constructing Amur GPP

Following an open competitive procedure, the decision was made to engage China Petroleum Engineering & Construction Corporation (СРЕСС, affiliated with CNPC) in the construction of the Amur gas processing plant (GPP) on the basis of an EPC contract.

April 04 2017: Gazprom: Alexey Miller and Uzbek Deputy Prime Minister Gulomzhon Ibragimov discuss gas cooperation

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Gulomzhon Ibragimov, Deputy Prime Minister of the Republic of Uzbekistan, took place in Moscow today.

The parties discussed cooperation in the gas sector in the lead-up to Uzbek President Shavkat Mirziyoev's official visit to Russia.

Contact: 495-719-30-01

Physical Address: 16 Nametkina St., 117997, Moscow, V-420, GSP-7

State/Province/Country: Russia

Exchange: Moscow Exchange (MICEX)

ISIN: RU0007661625

M:GAZP; MCX:GAZP; MM:GAZP; RM:GAZP; GAZP.MM

PermID: 4295887074

Source: www.BuySellSignals.com