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Sberbank of Russia (SBER.ME)
MCX - MCX Real-time price. Currency in RUB
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69 reactions on $SBER.ME conversation
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Sir John T
Any idea why the recent share price drop. Seems excessive as I believe SBRCY is still firing on all cylinders.....
Arrien & Mary
Q3 profit per share was 16 rubles vs 14 expected. Fantastic result and Sberbank is firing on all cylinders!
Fair value should be close to $25. At that price, the expected $3.12 earnings for 2021 gives you a P/E of around 8 and a dividend yield of 6.2%. If third Q earnings come in at 14 Rubles per share or more (56 Rubles per ADR), I expect this to hit the low $20's after earnings are announced and mid-$20's if 4th Q numbers confirm that rate of income. Still a great price despite today's spike.
What was that???
Arrien & Mary
Just tried to buy more she’s on line of sbrcy but was unable to put the order through because the SEC blocked trading Sbrcy! What is this? More government interference.?
Sir John T
I remain "intrigued" by SBRCY's commitment to transition from a standalone "bank" to an integrated "fin-tech" company. Management has done a great job with the bank and, on that basis alone, SBRCY shares remain at least 50% undervalued....a fair price being at least $23-25.
Now with the move into fin-tech (admittedly with a smallish commitment initially....but more ambitious plans over the next 3-5 years) I think they have the opportunity to sell at a higher multiple of their future prospects.
They'll never match AMZN but I think they can make a decent inroad and, on an overall basis, achieve perhaps a 2X-3X return in the next 5 years.....that would equate to a share price between $30-$45, all while continuing to pay out 50% in earnings in dividends.
SBRCY is also a dollar play as the Russian economy, for all of its faults, is pretty sound and conservatively managed.
$100,000 invested in SBRCY yields about $7,000 per year. To get the same yield from the S&P 500, you need to invest approximately $466,000. At the same time the US dollar will be collapsing from what will soon be $50 trillion in debt (not including the $80 trillion in "off balance sheet" debt for Social Security, Medicare, Federal pensions and Military pensions.) while Russia has virtually no debt in relation to other major countries and maintains a close-to-balanced budget. Where would you invest your money?
This is still cheap despite the almost 40% run up in the last few months. I'm estimating (rough based on 3rd Q net income) next year's earnings will come in at around $2.50 per ADR ($0.62 per regular share). Since they'd indicated an intent to pay out 50% of income in dividends, that will translate into dividends on the ADR's of around $1.25. If I'm right, that will translate into a yield of 8.7% at the current exchange rate of 75 rubles to the dollar. Add the high likelihood of a much weaker dollar (the ruble could easily be up 20% or more against the dollar if oil and gas prices firm up a little more) and Sberbank ADR's could easily be trading in the mid-$20's in the next few months. Russia's debt to GDP is the lowest of any major country which, in my mind, says there's a lot of room for the ruble to move against the dollar and Euro since the US and European countries are debasing currencies faster than anytime in history with the explosion of debt.
Based on the first two quarter's results, Sberbank is on track to earn 57 rubles per share in 2021 (228 rubles per ADR which represents four regular shares). At today's exchange rate of 73 rubles per USD, that equates to annual income of $3.12 per ADR. Since management has indicated their intent to pay out approx. 50% of earnings in dividends, the ADR shareholders will receive approx. $1.56 per share in dividend next year assuming the second half matches first half 2021 earnings. At today's price of $17.10 per ADR share, that translates into a yield of 9.1%. This still has a long way to run so I just added more today for income, capital appreciation and a hedge against a declining USD.
Sir John T
I've always tended to treat my holding of SBRCY as equivalent to a high-yield bond with an equity kicker. The divvy is a great payment while I hold and look for the company to deliver decent equity-based returns. Sber's move into e-commerce adds another positive.....and my thought is that, as their e-commerce arm gains traction, the P/E should also expand somewhat reflecting growing profit from those activities
There's no reason why this stock shouldn't appreciate by a minimum of 10%++ annually over the next 3-5 years....plus my dividend adds another 6%+ to my return based upon my average cost of about $13.80. What's not to like?
Anyone care to comment or critique my thesis?
Sir John T
If you apply a reasonable discount because it's a Russian bank, this stock is still a screaming buy. Looks substantially undervalued based upon ROE, ROA, book value....and other metrics. Plus, they are scheduled to continue raising their dividend payout through 2020 until they are paying out at least half of their earnings.
Clarification question for any Long-Term investors with Sberbank of Russia. LadaNiva or Gregory perhaps? I was doing some DD looking at the fundamentals, an was “shocked” when I noticed that Yahoo Finance had a ($977.58 - Book Value Per Share) listed for Sberbank of Russia. Is this value correct? That would make Sberbank of 🇷🇺, the most undervalued stock in the entire market. Thank You in advance for any of your help.
will this stock ever see gains again?
Sir John T
No recent messages....so I think I'll start a thread.
I've done quite a bit of work on SBRCY (as well as the opportunities in Russia).
The bank has a stellar record of accomplishment over the past decade even with the sanctions and past slowdowns in the Russian economy.
My comps were to some of the world's largest and better-known banks and this one came out as more than 50% undervalued---even after discounting the "Russia" factors.
I'm expecting 13% growth in EPS for the next 4-5 years, a dividend that will grow faster than that and a closing of the substantial discount in its P/E ratio to my comps.
Comments welcome !!!!
I just started following this stock. When would be a decent price range to buy in at iyo?
on a typical day about 75 times more shares trade hands on the Moscow exchange verse New York. Today in Moscow SBER.ME is up 1% at 278 Rubles which is just shy of the February 2018 all time high of 280 Rubles. looks like a 'Cup with a Handle' is forming.
Well seems just like there are only a few of us on this conversation but I doubled down on the stock today and have a cost average of 13.09. Wish you all luck and we get a rebound from these levels.
Moved part of my dividends received in August from OGZPY to SBRCY, dividends on dividends sort of thing :) Will hold long, and enjoy the dividends.
Contrarian play -- Russian bank with a good rep and good yield.
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