Russian stock report - Gazprom
Gazprom decreases, 4 days' volume in a day as investors eye AGM June 23, 2017 18:00 SAMT
NEWS BITES - BRIC
Gazprom (MICEX:GAZP), Russia's 2nd largest Oil & gas company by market cap, has decreased 7.0 Kopeck (0.1%) from its last trading session of June 22 to close at RUB119.05. Compared with the MICEX Index which rose 9.4 points (0.5%) in the day, the relative price change was -0.6%. The fall was exacerbated by extraordinary volume of 3.8 times the average daily volume of 5.5 million shares.
UPCOMING EVENT: AGM
The annual general meeting (AGM) will be held on Friday, June 30.
GAZPROM BEARISH SIGNALS
+ As per the Du Pont analysis, Return on Equity is less than stellar at 7.6%. This is computed as net profit margin of 13.3% times asset turnover [sales/assets] of 0.42 times leverage factor [total assets/shareholders' equity] of 1.6.
1.2 Overvaluation [compared with sector average]:
+ Return on Equity 7.6% [10.2%].
+ Return on Assets 4.7% [5.4%].
+ The price dropped 3.2% in the last month. The fall has been exacerbated by spectacular volume of 5.9 times average for the month.
+ In the last three months the stock has hit a new 52-week low sixteen times, pointing to a significant downtrend.
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 118.35 minus the 26-day EMA of 120.73 is negative 2.38 suggesting a bearish signal.
+ The present value of RUB1,000 (PV1000) invested one year ago in Gazprom is RUB831, for a capital loss of RUB169.
1.4 Low Performance Indicator:
|Description||Value||Rank In Market|
|% Prem to Vol Wtd Price||0.5||In Bottom Quartile|
GAZPROM BULLISH SIGNALS
+ The P/E of 3.5 multiplied by the P/NTA of 0.3 is 0.9. 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 and ranks in the top quartile of stock by value of Q Ratio.
+ The company is cash rich with Cash to Market Capitalisation at 48.2%.
+ Net profit margin has averaged 12.8% in the last 3 years. This is better than the sector average of 9.2% and suggests a high margin of safety.
+ Brandirectory have estimated Gazprom brand value at RUB497.8 billion (US$8.3 billion). The Brand Value represents an impressive 9.5% of the estimated Enterprise Value of RUB5,226.5 billion (US$87.3 billion).
+ Revenue growth rate is positive and has seen consecutive rises in recent years. [Year ended, all figures in %]
|Year||Revenue Growth||EPS Growth|
2.2 Undervaluation [compared with sector average]:
+ Price/Earnings of 3.5 [6.4].
+ Price/Sales of 0.4 [0.6]. We estimate Gazprom stock is trading at a current year Price/Sales of 0.3 and a forward year Price/Sales of 0.3.
+ Price to Book of 0.3 [0.7]. We estimate Gazprom stock is trading at a current year Price to Book of 0.3 and a forward year Price to Book of 0.2.
+ Return on Capital Employed 15.6% [13.6%].
+ Price to EBITDA of 1.2 [2.5].
+ The present value of RUB1,000 (PV1000) invested ten years ago in Gazprom is RUB11,649, for a capital gain of RUB10,649.
+ 10 years Multiplier in RUB = 11.649x
+ Compound Annual Growth Rate (CAGR) in RUB = 27.8%
Present Value of USD1,000 invested 10 years ago:
+ The present value of USD1,000 (PV1000) invested ten years ago in Gazprom is $US5,053, for a capital gain of $US4,053.
+ 10 years ago USD 1 equalled RUB 25.974
+ 10 years Multiplier in USD = 5.053x
+ Compound Annual Growth Rate (CAGR) in USD = 17.6%
Jun 23, 2017: USD 1 equals RUB 59.88
2.4 High Performance Indicators:
|Description||Value||Rank In Market|
|Cash to MCap %||48.2||In Top 2%|
|Today's Turnover||RUB2.5 billion (US$41.4 million)||In Top 2%|
|Earnings Yield %||28.8||In Top Quartile|
|Volatility %||1.2||In Top Quartile|
|Total Debt to Equity||0.3||In Top Quartile|
PRICE VOLUME DYNAMICS
+ Volume: there were 20,798,430 shares worth RUB2.5 billion (US$41.4 million) traded today. In the past week, volume was 4.5 times average and the shares were up 3.5%.
+ Gazprom is at a discount of 25.9% to its 12-month high of RUB160.62 on December 14, 2016. It is also at a premium of 6.8% to the 12-month low of RUB111.46 on June 15.
+ Beta: the Beta of Gazprom stock is 1.1. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.
3.3 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 33.2% (or a turnover period of 3 years 4 days). This average length of ownership of the stock at 0.7 times the average holding period of 4 years 3 months for stocks in the MICEX Index suggests a slightly larger number of speculators on the share register, making it less safe for long-term investors.
4.1 Global Rank [out of 47,450 stocks] and Rank in the Europe Region [out of 8,291 stocks]
|Description||Value||Global Rank||In Eur Region|
|Total Assets (US$)||284.8B||245||56|
|Net Profit (US$)||13.4B||34||1|
|Return on Equity %||7.6||16,327||2,878|
|Net Profit Margin %||13.3||8,539||1,436|
|Price to Book||0.3||1,786||422|
|PV$1000 (1Year) US$*||889||29,726||5,044|
|US$* Change (1Year) %||-11.9||29,338||4,969|
* 1 year ago USD 1 = RUB 64.52
Jun 23, 2017: USD 1 equals RUB 59.88
4.2 Independent Ratings
Gazprom is the 3rd largest company in the Platts Top 250 Global Energy Company Rankings.
It was ranked 8 in IHS Energy's list of Top 50 Energy Companies 2013; an improvement over a year from rank 9 in 2012.
It is the 19th largest by revenue in the Forbes Global 2000.
It was ranked 36 in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2015; a deterioration over a year from rank 17 in 2014.
It is the 43rd largest by revenue in the FT Global 500.
It was ranked 84 by MCap as at March 31, 2015 by PwC in the Top 100 Global companies; a deterioration over 6 years from rank 38 as at March 31, 2009.
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$868 million.
It was ranked 331 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 18.2% in Carbon productivity, 14.8% in Waste productivity and 14.3% in Reputation.
It is placed 99/129 in BSS News Bites' ranking of Russian performers in the past year, a percentile ranking of 24.
5.1 Financials Summary
|Year ended||Dec 2015||Dec 2014||Dec 2013|
|Sales (USD B)||123.5||103.2||93.6|
|Pretax (USD B)||15.9||5.3||(155.1)|
|Net (USD B)||13.8||2.7||20.1|
5.2 Annual Report for the year ended December 31, 2015 (year-on-year comparisons with previous corresponding period)-
Gazprom Net Profit up 412%
+ Total revenue up 19.7% from RUB6,002.2b ($US107.6b) to RUB7,183.0b ($US98.0b).
+ EBIT Margin up from 31.2% to 38.4%.
+ Interest cover up 37.2% from 1.2 to 1.7.
+ EBIT to total assets up from 11.5% to 13.7%.
+ Interest expenses to Sales down from 24% to 19.6%.
+ Interest revenue to Sales up from 6.5% to 13.8%.
+ Profit before tax to Sales up from 5.1% to 12.9%.
+ Working capital to total assets up from 10.6% to 11.0%.
+ Total current assets to Total Assets up from 22.8% to 23.4%.
+ Cash to Total Assets up from 6.8% to 8%.
+ Total Liabilities to Operating Cash Flow of 3.0 compares favourably with the Joseph Piotroski benchmark of <4. However, it has deteriorated by 14.4% from the previous year's ratio of 2.6.
+ Net tangible assets per share up 7.9% from RUB410.26 ($US7.4) to RUB442.78 ($US6).
+ Total liabilities to Total assets up 9.1% from 0.3 to 0.4.
+ Retained earnings to total assets down from 63.2% to 60.8%.
+ Current Debtors to Total Assets down from 6.9% to 6.5%.
+ Total revenue to total assets steady at 0.4.
+ Tax expenses to Sales down from 2% to 1.4%.
+ Debt to Equity steady at 0.3.
+ Current ratio steady at 1.9.
+ Total non-current assets to Total Assets down from 77.2% to 76.6%.
+ Fixed Assets to Total Assets down from 65.6% to 64.5%.
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 Level||Name of Sector|
|Business Sector||Energy - Fossil Fuels|
|Industry Group||Oil & 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 RUB2,818.3 billion (US$47.1 billion).
To view Recent Company Headlines, click here
May 12: Gazprom announces AGM
April 06: Alexey Miller: first medium-term contract signed for Uzbek gas to be purchased by Gazprom
April 04: Gazprom: China's СРЕСС to take part in constructing Amur GPP
April 04: Gazprom: Alexey Miller and Uzbek Deputy Prime Minister Gulomzhon Ibragimov discuss gas cooperation
October 11 2016: Yury Maramygin put in charge of Gazprom Transgaz Volgograd
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