Seeking Alpha
Long only, contrarian, special situations, value
Profile| Send Message|
( followers)  

After 18 years of negotiations, Russia is set to join the World Trade Organization. This got me to looking at Russian stocks to see if any looked like compelling bargains. One stock, CTC Media (CTCM), stood out for its high yield and cheap valuations. It also has been around since 1989, is heavily covered and insiders have been buyers as well.

7 reasons CTCM offers solid value at under $8 a share:

  1. The stock yields almost 7% (6.8%) and has over $100mm in net cash on its balance sheet.
  2. CTCM is selling at the bottom of its five year valuation range based on P/E, P/S, P/B and P/CF.
  3. Unlike many Russian stocks, this equity is heavily covered. 20 analysts cover the stock and have a median price target of $12.50 on CTCM, 50% above the current price.
  4. An insider picked up more than $1.5mm in new shares at higher prices late last year.
  5. The stock is cheap at just under 7 times forward earnings and the company has easily beat earnings estimates the past two quarters.
  6. The company has grown revenues at around a 10% annual clip over the past five years. Analysts project 8% to 10% sales growth for both FY2012 and FY2013 and the stock has a very low five year projected PEG (.33)
  7. The stock looks like it is trying to bottom here and CTCM was in the 20's less than a year ago (see chart).


(Click to enlarge)

Source: Russia's CTC Media: 7 Reasons To Say 'Da' To This 7% Yielder