3 Companies Paying Close Attention to Russia and Ukraine

These three companies have significant stakes in the region. Time will tell what happens to them.

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

With each passing day, the tensions in Crimea are taking a new turn. And while everyone is hoping that the conflict doesn’t descend into something much worse, most businesses in Canada are relatively unaffected.

That being said, there are some companies that have a significant chunk of their business in Russia or Ukraine. Three in particular are worth mentioning.

Kinross

Kinross Gold (TSX:K)(NYSE:KGC) is one of Canada’s largest investors in Russia – the company’s two Russian mines account for over a quarter of its total production. Kinross is also the only Canadian company on Russia’s Foreign Investment Advisory Council, which in the past has even helped the company influence government policy in the region.

Kinross is confident it can operate in Russia, despite the turmoil. The company points to its long track record of stakeholder agreement in the region, and believes that is what really matters in the end.

Ag Growth

After initially stumbling with its push for international expansion, agriculture equipment manufacturer Ag Growth (TSX:AFN) has made some real headway. The stock is up about 50% since late 2012.

But the company derives 16% of its sales from Russia, Ukraine and Kazakhstan. And a majority of these revenues come from Ukraine. Like Kinross, Ag Growth has said it doesn’t expect to be affected by the events. It has remained in constant contact with its customers in Ukraine, and is still comfortable. Also most of Ag Growth’s Ukrainian customers make money in U.S. dollars, and would not be stung by a decline in currency values.

Bombardier

Unlike the first two companies, Bombardier (TSX:BBD.B) has acknowledged that tensions in Russia are taking a toll on the business. The aerospace and rail equipment company is currently in negotiations with Russia concerning the company’s Q400 turboprop planes. Last year, Bombardier struck a $3.4 billion deal to sell 100 of those planes in Russia.

The market represents a huge opportunity for Bombardier. But lately the company said that the turmoil has “softened up a little bit the discussions.”

Foolish bottom line

So far, all three of these companies have seen minimal effect on their business. But Canadian Prime Minister Stephen Harper has been very supportive of Ukraine in the past, mainly due to Canada’s large Ukrainian population. He will likely be as tough on Russia as any other leader. And if Russia retaliates, the situation could get a lot worse for the three companies above.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Benjamin Sinclair holds no positions in any of the stocks mentioned in this article.

More on Investing

Supermarket aisle with empty green shopping cart
Investing

$183 for Toilet Paper and Cups: Why We Love Costco Stock

"I literally went up there to get two things."

Read more »

A worker gives a business presentation.
Investing

TFSA Investors: 2 Top Stocks to Buy Before They Rally Any Further

Although plenty of top Canadian stocks have been rallying recently, these two still offer great value and are perfect for…

Read more »

growing plant shoots on stacked coins
Stocks for Beginners

3 TSX Stocks With High Dividend Yields

Are you looking for a great opportunity to bolster your portfolio? Here are three TSX stocks with high dividend yields.

Read more »

financial freedom sign
Stocks for Beginners

1st-Time Investors: 2 Cheap Canadian ETFs to Buy for Financial Freedom 

Investing for the first time but don’t know where to start? Here are two cheap Canadian ETFs that can grow…

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

Got $4,000? 4 Simple TSX Stocks to Buy Right Now

The macroeconomic environment is tense but investing can be simple. Here are four stocks to buy now and book your…

Read more »

Oil pumps against sunset
Energy Stocks

2 Top Canadian Energy Stocks to Buy Offering Dividend Yields Above 6%

These two top Canadian energy stocks are excellent long-term investments and offer unbelievable dividend yields if you buy them today.

Read more »

Target. Stand out from the crowd
Investing

4 TSX Stocks I Own and Will Buy More of if They Fall

These are my four top choices of TSX stocks that may dip in the future, but will pay me back…

Read more »

Dollar symbol and Canadian flag on keyboard
Stocks for Beginners

The 2 Best Canadian Stocks for Beginners Right Now

Stock market beginners in Canada could kickstart their investing journey by buying these two stocks right now.

Read more »