The Russian economy is one of the top-four fastest growing in the world. As part of BRIC (Brazil, Russia, India and China), the nation is in an elite group, but the past few years have been disappointing. Many see the lows and decide to invest in other economies, or keep their funds domestic. I’m not criticizing them for doing so — Russian stock values have plummeted by about a third in the two years after the global recession.
While there is a fair amount of risk by investing in Russia now, stock prices can’t really get any lower, and the upsides are astronomical. Here are three Russian companies traded on the NYSE that can help you capitalize on many other investors’ fear.
Mobile TeleSystems OJSC (ADR) (NYSE:MBT) is in a solid position to grow its business on the increasing number of Russians who can afford cellphones. While a person without a cellphone in the United States is relatively rare, many people throughout Russia are just beginning to get their hands on the devices. The company is also active in pay-television, and other communications and entertainment ventures.
While the company has about $11 billion in liabilities compared to nearly $15 billion of assets, it is cutting about $350 million of liabilities in each of the last three years, while assets have increased about $400 million in the same span. Look for great things from this company in the years ahead.
Don’t let the name of this next recommendation fool you, it is available to every investor. VimpelCom Ltd (ADR) (NYSE:VIP) is a telecommunications holding company, which provides more security than investing in Mobile TeleSystems OJSC (ADR) (NYSE:MBT), though the profits would likely be less because it is so diversified.
With the telecommunications industry set to thrive in Russia from the growing middle-class and its increasing disposable income, VimpelCom Ltd (ADR) (NYSE:VIP) has its finger on the pulse of a potential boom in Russia. The stock’s initial public offer on the NYSE was in 2010, and it went down from $18.70 to around $7.50 early in 2012 before recovering to its recent $12 level. This stock is undervalued. The company is worth nearly $20 billion, and revenue has more than doubled since the company’s IPO.