3 Canadian Stocks With Russian Exposure

Will investors feel Russian pain from these 3 companies with exposure to the country?

| More on:
The Motley Fool

One of the biggest news stories this year has been the situation in Crimea. It may seem far away, but here in Canada, we aren’t totally immune to these events. Our government has condemned the Russian actions, joining in international sanctions against the country. Russia responded by banning 13 Canadian lawmakers from entering the country, all with Ukrainian ties.

But that’s not the only way Canada has been affected. In this age of worldwide finance, there are Canadian companies with substantial operations in Russia. Here are three large caps with Russian exposure that may be in your portfolio.

Kinross Gold

Shares in Kinross Gold (TSX: K)(NYSE: KGC) are down close to 20% since the crisis started, and the company has recently started to encourage Steven Harper’s government to ensure Canadian companies operating in Russia won’t be hurt by the sanctions. Harper’s response was essentially “too bad.”

Kinross is the Canadian company most exposed to Russia, as approximately 27% of the company’s production is located within the country. While the company hasn’t seen any changes so far in operations, it is obviously encouraging both governments to tone down the rhetoric. Kinross is somewhat being helped by a lower Russian Ruble, which decreases costs in the country.

Kinross’s biggest fear is that the Russian government could seize mines if relations between the two nations get too strained. Operating in Russia during good times has obvious political risk, and it only gets worse during times of international tension. So far it has been business as usual for Kinross’s operations in Russia, but it’s still something investors should keep in the back of their minds.

Bombardier

Canadian aerospace giant Bombardier (TSX: BBD.B) has a joint project with Russian train maker that brings in about $240 million per year in revenue, which continues to run smoothly. The company is also in talks with a company near Moscow to partner with it on assembling C-Series aircraft. These talks have slowed since the onset of tensions, and likely won’t happen unless things get better between the two nations.

Valeant Pharmaceuticals

Canadian biotech company Valeant Pharmaceuticals (TSX: VRX)(NYSE: VRX) does more than $400 million per year in sales in Russia, and it hasn’t really seen those sales affected materially. Company spokesperson Laurie Little said, “so far the only impact we feel in Russia is currency movement, which could continue to fluctuate. Currently it is business as usual for Valeant.” Considering Valeant had $5.8 billion worth of total sales in 2013, don’t look for Russian currency fluctuations to have a huge impact on the bottom line.

Foolish bottom line

Shareholders in Kinross have reason to be nervous about Russian operations, especially if Russia decides to continue with its imperialistic ambitions in the region. At this point, there’s little risk in any material changes in Canadian business in the region, but investors should keep one eye on the news coming out of the region.

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 Nelson Smith has no position in any stock mentioned in this article.

More on Investing

Close up of an egg in a nest of twigs on grass with RRSP written on it symbolizing a RRSP contribution.
Dividend Stocks

Turn $5,000 Into a Growing Nest Egg With These Dividend Knights

Explore the world of dividend investments. Discover why dividend knights are key for your retirement portfolio.

Read more »

analyze data
Investing

Should You Buy Emera While it’s Below $65?

Let's dive into whether Emera (TSX:EMA) is a utility stock worth buying right now, or if investors should wait for…

Read more »

A plant grows from coins.
Investing

1 Magnificent Growth Stock to Own for the Next Decade

This magnificent growth stock might be an excellent investment for growth-seeking investors who want to buy and hold a stock…

Read more »

Canadian Dollars bills
Dividend Stocks

Want Year-Round Income? 4 Dividend Stocks Paying Consistently

There are some stocks that are just easy buys, and these four should be some of them.

Read more »

Investing

3 Under-$50 Canadian Stocks to Buy for Superior Long-Term Returns

Given their solid financials and healthy growth prospects, these three under-$50 Canadian stocks are ideal for long-term investors.

Read more »

rain rolls off a protective umbrella in a rainstorm
Dividend Stocks

Building a $50,000 Portfolio That Can Weather Any Market Storm

This defensive investment portfolio uses three ETFs to ride out any recession.

Read more »

Two seniors float in a pool.
Retirement

Want to Retire Rich? 3 TSX Stocks to Add to Your Portfolio Now

These TSX stocks could deliver above-average returns in the long run, helping you build wealth over time and retire rich.

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Top 3 TSX30 Winners: Understanding the Recent Stock Drop

Three TSX30 winners in 2024 have experienced price drops this year and continues to underperform due to massive headwinds.

Read more »