Gazprom OAO (ADR) (NASDAQOTH:OGZPY)

CAPS Rating: 4 out of 5

Recs

3
Player Avatar ikkyu2 (99.19) Submitted: 3/26/2011 3:36:49 PM : Outperform Start Price: $10.67 OGZPY Score: -100.06

This is the national Russian (previously: USSR) natural gas company. Along with the Russian national oil company, Gazprom makes Russia into the world's #1 energy exporter. They are the main exporter of NG to Europe and are trying to expand into providing NG to China and, post-Fukushima, to Japan.

When I picked them here in CAPS, their P/E ratio was 4. Go compare that to the US major integrateds, or Total SA or Royal Dutch Shell.

When folks think of Russia, they think of the Kremlin, hidebound Politburo members and central planning. Waste and inefficiency. Corruption. Well, Russia has changed, and the corruption is starting to work in favor of the capitalists, rather than against them. I realize that Gazprom may not be the most transparent or the most ethical of corporations, but they do own more of the world's natural gas reserves than any other company, and I simply don't think the discount applied to the earnings is justified, especially given global energy demand trends over the next 15-20 years.

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