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Alan Selwood
Posted: 20 June 2017 13:13:55(UTC)

Joined: 17/12/2011(UTC)
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Like Terry Smith, I have an aversion to holdings in countries where politics and corruption could see my investment damaged or destroyed or confiscated.

So JRS rates with me as 'Cheap for a reason'.
3 users thanked Alan Selwood for this post.
Mr Helpful on 20/06/2017(UTC), Sara G on 20/06/2017(UTC), dlp6666 on 21/06/2017(UTC)
Micawber
Posted: 20 June 2017 15:42:35(UTC)

Joined: 27/01/2013(UTC)
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Governance. Sanctions. Oil.


The worldwide oil/commodities recovery last year accounted for a good part of JRS's trailing performance. JRS is 41% energy, 13% commodities. But Russian oil production is being restrained in conjunction with Opec. The oil price is also effectively capped by increases in US shale even at present lowish prices.

The likelihood of sanctions abating with Trump in the White House gave JRS a boost from November to January. But that likelihood has receded with Trump's growing problems in Washington over links with Russia, and with US/Russian friction in e.g. Syria.

Governance (as Alan points out) remains a problem. It does not seem likely to change under Putin's continued leadership (assuming he does not take the opportunity to retire...).

Those arguing in December that the Russian market's low P/E represented a bargain have seen JRS decline 15% since then. It may be cheap if you think that one or more of the above limitations is likely to improve.
3 users thanked Micawber for this post.
Sara G on 20/06/2017(UTC), Mr Helpful on 21/06/2017(UTC), john_r on 21/06/2017(UTC)
King Lodos
Posted: 20 June 2017 22:42:44(UTC)

Joined: 05/01/2016(UTC)
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As they say: You pay a high price for a cheery consensus.

Russia's on a CAPE ratio of 5.3; Dividend Yield 3.9%; but also strong projected earnings growth up around 17-18%.

So by some measures it's as much as 5x cheaper than US stocks – but of course the US is full of high quality companies and tech, and Russia's a big bet on energy and banks .. Even taking that into account, I think Russia's cheap.

Russia/Emerging Europe had a strong 40% or so performance over the past year .. I tend to find Emerging Mkts hard to trend-follow – upside is often sharp and unexpected – so I maintain a holding to Russia as a form of diversification: if the number one problem right now is high valuations, Russia's at least got different problems.

Russia and Emerging Europe was 20% of my stocks portfolio through 2016 .. Today it's about 10% (but only 3% of my overall portfolio) .. I'd suggest rebalancing .. Hold a small, sensible allocation and maintain it, taking profits when momentum starts to turn. You can profit from the volatility of EM alone, even if it only goes sideways, and with Russia you might make a reasonable dividend income too.

4 users thanked King Lodos for this post.
Mr Helpful on 21/06/2017(UTC), john_r on 21/06/2017(UTC), dlp6666 on 21/06/2017(UTC), Sara G on 21/06/2017(UTC)
Chris Ould
Posted: 21 June 2017 07:25:57(UTC)

Joined: 13/01/2014(UTC)
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On a different note, any holders of Severfield have an opinion going forward?...recall that Cueball was a fan, but not been around much lately.

Had a good run, but not sure there is much upside over the next few months...UK order book is declining and 'expansion' in India seems a bit distant.
john_r
Posted: 21 June 2017 10:04:59(UTC)

Joined: 18/06/2010(UTC)
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Chris Ould;48122 wrote:
On a different note, any holders of Severfield have an opinion going forward?...recall that Cueball was a fan, but not been around much lately.
Had a good run, but not sure there is much upside over the next few months...UK order book is declining and 'expansion' in India seems a bit distant.


Prefabricated steel structures seems a sensible way forward to me in a world where new infrastructure is often a buzzword. Severfield has had a good year doubling profits on its way back from earlier problems. Significantly the indian joint venture has also produced its first profit albeit miniscule.
SFR still talks of quadrupling profits by 2020 which I assume means doubling again from this years figure. Current ROCE 14.6% Fwd P/E ~14.6
My view : happy to hold a while yet.
1 user thanked john_r for this post.
Chris Ould on 21/06/2017(UTC)
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