Tuesday 8 July 2014

Analysis of Yandex

Yandex, a Russian internet company

Company: Yandex

ISIN NL0009805522 | WKN A1JGSL

Business: A Russian/Dutch internet company. Their headquarter is in Russia but they are registered in Amsterdam. They have three business segments in this Russian "Google": Online Services & Mobile Applications (for their 100 million customers to help them with their internet needs), Technologies (the biggest Russian search engine with the infrastructure that follows) and finally Education & Research (run their own math & programming education to teach their future employees and to be able to hand-pick the best ones).

Active: Main activity is in Russia but they are also present in Ukraine, Kazakhstan, Belarus and Turkey.

P/E: 29.8

This company was analysed due to a request that arrived over twitter. Sorry but I do not remember who it was that requested the analysis.

contrarian values of P/E, P/B, ROE as well as dividend for Yandex

The P/E of Yandex is extremely high with 29.8 and the P/B follows with 8.6 which gives a very clear no from Graham. The earnings to sales are excellent with 35% and the ROE is equally great with 28.9%. The book to debt ratio is excellent with 1.9. In the last four years they have had a yearly growth rate of 32.9% which is spectacular and makes one wonder if it can continue like that... so therefore the motivated P/E gets broad and I would say between 30 and 70 which means that Yandex today is under- to fairly-valued by the market. They spend money on research which correspond to 43% of their earnings which is lower than what Google spends but still a lot so this I like. They pay no dividends which I do not like at all.

Conclusion: Graham says no to this company and so do I. Most likely I am wrong with that decision because we already know that the Google concept is working and Yandex is pushing that on the Russian market very successfully by the look of the figures but they are therefore also highly valued on the market. So even though the ROE, book to debt and earnings to sales and yearly growth is excellent I decide to stay away from Yandex due to the high P/E and high P/B.

What do you guys say? Am I wrong on this one?

If this analysis is outdated then you can request a new one.

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