Gazprom (OGZPY) has long been a favorite of mine. I’m not generally fond of energy companies, because they sell commodities, are quite cyclical and their valuations don’t often reflect that cyclicality.
However, Gazprom is somewhat different, because:
- It has access to very low cost natural gas fields in Russia. For a commodity producer, sustainable low costs are a must.
- It owns an extensive pipeline delivery network into Europe, whose replication is difficult in many different ways (regulatory, cost, etc.). It also owns the right to monopolistically export through that network from Russia.
- It