Emerging Money: Russia
As Fast Money’s emerging markets specialist, Tim Seymour is always searching for ways to trade the world’s developing economies.
Russia looks particular compelling, Seymour said on Wednesday’s Closing Bell, because the country is on the precipice of what could be a major political and economic sea change as a new president, Dmitri Medvedev, takes the reigns from Vladimir Putin, who has served as Russia’s president for the last eight years.
This political changing of the guard is significant, according to Seymour, because it represents a chance for the country to grow and improve its economy under Medvedev, who has vowed to diversify away from primarily focusing on oil and gas revenues.
And, right now, Russia is cheap. The cheapest of any emerging market, as far as Seymour is concerned. It trades 10 times this year’s estimated earnings and nine times next year’s. Compare that to 13 or 14 times earnings for Latin American countries or 15 for parts of Asia.
Seymour’s favorite Russian stocks range from well-known giants like *Gazprom, Mechel and *VimpleCom to somewhat lesser known stocks such as Mobile Telesystems , Wimm-Bill-Dann Foods and CTC Media . And there’s always the Market Vectors Russia ETF, which is a way to play the country’s growth without exposure to a single sector.
Russia will continue to have some amount of political risk associated with it, Seymour said, but investors should now have a sense that stability in the Kremlin coupled with a growing economy could spell profits for this emerging market.
*Indicates companies included in Fast Money's Emerging Money Top 20, an index made up of 20 firms poised to profit from explosive global growth.
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