Wrapping up the week-long countdown of the top European stocks to own for 2015, my number one pick is CTC Media, the leading TV broadcaster in Russia. This stock has been absolutely crushed over the past six months, down 50%, as a dark cloud has formed over the Russian economy. But the magnitude of this sell-off is absolutely preposterous. Not only does TV continue to be the most attractive advertising medium in the country, with 50% of total ad spend, but CTC’s largest advertising clients come from highly stable industries, industries that will still be able to pay the bills amidst a wilting economy. CTC also has a beautiful balance sheet, with no debt and $150 million in cash. Couple that with impressive cash flow generation, a huge buyback mandate and a juicy 15% dividend, and you can see why I’m chomping at the bit to snatch up some shares. Applying a very modest multiple on its $200 million in operating income over the last twelve months, I get to an equity value of $1.5B, more than double its current market cap of $730M. So mark my words – CTC Media will be the comeback king in 2015.
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