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VEON: A Stock For All Seasons

Mar. 08, 2021 3:20 PM ETVEON Ltd. (VEON)17 Comments
WMA, LLC profile picture


  • Continue to avoid stocks with lots of air under the price.
  • VEON offer a nice combo of valuation, yield, and stock upside potential.
  • A diversification play into a less-crowded industry group.
  • This idea was discussed in more depth with members of my private investing community, WMA Investments & Monitors. Learn More »

With markets showing some signs of topping, and the S&P 500 still less than 3% from all-time highs, investors who want/need to cushion their portfolios against a downside move still have time. Often the catalyst for a move in the stock indexes comes after the movement already is in motion. Right now, the jump in interest rates, which reduces the present value of a firm’s future earnings stream, is triggering some sharp days of selling in the obviously overvalued segments of the market. The Nasdaq-100, for example, hit the -10% draw-down level this past week. Is this the correction? We don’t want to bet against the irrationality and greed of the buy-the-dip-at-any-price momentum investors, even if we are just about certain that one day, they will suffer permanent capital impairment.

What interests us as long-term investors is not speculation on the tech mania and stocks that have doubled or tripled (or more) in the past year, but rather positioning our portfolios in stocks that a higher probability of providing steady, above-market returns. As basketball commentator Dick Vitale used to say, we want to swing for Pete Roses, not Reggie Jacksons (ie: the safe, higher probability stocks, not the long-shot higher risk stocks). There will come a time to buy tech/growth, but that time is not when investors are fighting with one another to buy these stocks hand-over-fist before the next guy.

This week we added a telecom stock to our equity section portfolio. With market valuations stretched, 84.2% of U.S. stock above their 200-day moving average, and the average stock trading within 3% of its 52-week high, we are rotating out of momentum stocks at/near record highs. We are looking for a cushion in the portfolio via strong valuation stocks with good dividends. More specifically, stocks that don’t have a lot of air under

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This article was written by

WMA, LLC profile picture
Williams Market Analytics, LLC is a quantitative research boutique offering insightful, actionable analysis of financial markets. The firm also runs systematic, absolute return allocation strategies using quantitative models and a fundamental company ranking methodology. Our strategists have a combined 60 years of market experience with one PhD in finance, two MBAs, and the CFA charter. As authors of WMA Investments and Monitors, a premium subscription service at Seeking Alpha, our objective is to bring investors timely investment ideas and decision-support tools to aid readers in building their own long-term portfolios. The service includes real-time access to several actively managed strategy portfolios, access to our Fundamental Allocation Model, and our quantitative Daily Trading Models. .

Analyst’s Disclosure: I am/we are long VEON. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (17)

WMA, LLC profile picture
they are restarting the dividend at $0.15 after their Q2 reporting period
Askar Top profile picture
when and how much will they pay in dividends for 2021? any ideas? thanks
Thoughts on the short interest? At the end of September, there were 6.8 million shares short. At the end of March, there are now 30.6 million shares short. That’s a ton. Any thoughts on why?
WMA, LLC profile picture
@Nolan W. No idea why shorts are on VEON. We follow the analysts covering VEON. They know the company, yet no one is even revising down earnings forecast. Does not give with short interest....
@WMA, LLC I agree with you. I could see a squeeze coming at some point.
They should not pay a dividend. Like bud, an over leveraged company like this should use cash to debt reduction
Additional reason i am buying veon is because of the expansion into banking lending business via mobile. They are doing great on it.
With all due respect, this stock has done nothing but go down since 2013, losing 90% of its value from the peak in 2013. Recently, the descent of the stock price has only slowed, possibly maybe plateauing. An underperformer to say the least. If you want to buy for a “technical” bounce.....well as we always say “a broken clock tells the right time twice a day”. As a true investment....yikes!
WMA, LLC profile picture
@rsmab01 the alternative is is join the crowd and do what everyone has been doing: buy the ARKK innovation ETF. We like to think outside the box, which is obviously discomforting to go against the grain. Many reasons NOT to buy VEON --- but are they all priced in already??
I am hoping VEON will give a .15 cent dividend in early 2022 based on 2021 earnings. Do you think that is likely?
WMA, LLC profile picture
@Terrymnola from what we see with the Refintiv forecasts, a dividend will be paid in 2021. This is key to our buy recommendation.
Glad to hear of an expected dividend reinstatement. Enjoyed the article. Have a number of the other stocks you list, as well as the more common VZ and T.  Expect the increase in oil prices may help VEON, since oil and gas is a big part of the Russian economy. Added 600 VEON shares earlier, in the $1.30 - $1.50 range, during earlier part of pandemic.

Added a small amount of VZ after the big East Coast (US) fiber cut that shut-down parts of MSFT Teams, AMZN, Google Search and a bunch of East Coast financial firms. Added a little more after shareholders were displeased by the VZ 5G C-band spending ($53 billion).
WMA, LLC profile picture
@bill.reist agree, we think that dividend-paying telecoms like VZ, T and VEON are a smart bet right now. There is a lot of silliness occurring in many parts of the equity space
Baloney Sandwitch profile picture
I get that it's beaten down, but I did not understand your rating methodology. How do you derive all those WMA scores you are presenting? A link to your methodology will enhance the article, otherwise the reader is just being asked to accept at face value.
WMA, LLC profile picture
@Baloney Sandwitch thanks for your comment. Most of our readings are familiar with our methodology, which involves ranking companies within their Industry Group, using balance sheet data and Refintiv consensus growth estimates, and analyst earnings revisions. The final layer of analysis is a quantitative analysis of price itself. Here is a summary of our models: www.williamsmarketanalytics.com/...
Good article. Thanks.
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