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Russia vs Ukraine – Now What Do We Do?

With the current Russian invasion of Ukraine, George Fisher, editor, Guiding Mast Investments newsletter included commentary from First Trust Advisors which could provide added insight into the impact for US investors. In his latest issue, Fisher noted that JP Morgan ran a screen for stocks with revenue exposure to Russia and Ukraine, and the following stocks are on their “Avoid” list. “As has been our position for a few quarters now, a defensive investment stance remains our preferred approach,” says Fisher.

“First Trust Advisors has an interesting take on the conflict: An invasion is unlikely to change the long-term outlook for US corporate profits. As a result, any drop in equities could end up being a buying opportunity.

Consensus seems to be the stocks which should benefit are not surprising in sectors reflecting tighter oil and gas supplies, industrial basic materials, and aerospace/defense.

For underperformers, JP Morgan identified companies with revenue exposure to Russia and Ukraine based on FactSet’s Revenue database and proprietary textual analysis. Their underperforming list includes:

Energy: Linde (LIN), Kinross Gold (KGC), Arconic (ARNC), Sylvamo (SLVM)

Industrials: Boeing (BA), AGCO (AGCO), Air Lease (AL), Delta Air Lines (DAL), United Airlines (UAL), American Airlines (AAL)

Consumer Discretionary: Gentherm (THRM), Mohawk Industries (MHK), McDonald's (MCD), Carnival (CCL), PepsiCo (PEP), Mondelez International (MDLZ), Bunge (BG), Philip Morris (PM), Kimberly-Clark (KMB), Estee-Lauder (EL), Coty (COTY), Herbalife Nutrition (HLF)

Healthcare: Alnylam Pharma (ALNY)

Info Tech: Fortinet (FTNT), Trimble (TRMB)

As expected, country ETFs focused on Russia and Ukraine has taken a beating. However, one European holding company worth watching is Groupe Bruxelles Lambert SA (GBLBF). GBLBF offers an actively managed portfolio of European stocks where management believes they can have a friendly input on improving company profitability. Most equity positions are long-term in nature and many equity investments come with representation on the Board of Directors. 77% of GBLBF’s NAV is equity investments in publicly traded stocks with the balance in private-equity type investments.

If GBLBF drops to around $88, from its current $107 (as of 2/24), the valuation could provide an interesting entry or addition point. Keep in mind GBLBF historically trades at a discount of 20% to 25% to its NAV. As of Jan 20, 2022, the NAV discount was 31.4%.

I have been a GBLBF shareholder for around 10 years.” For GBLBF’s latest investors presentation Click Here.

Editor’s Note: Edited by George Fisher, Guiding Mast Investments newsletter comes in two-parts – 1) written commentary and 2) the spreadsheet of the companies he follows and several fundamental analysis calculations. Fisher offers portfolio strategies and implementations with a flair for value and income. For more information visit

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