Business to Count On

Tomahawk, WI 05/08/2014 (Basicsmedia) – Though recent political events did have an impact on Russia’s search engine’s stocks, Yandex NV (NASDAQ:YNDX )‘s increasing earnings, strong basics and economics keeps it ticking. The stocks dropped about 38% in response to Ukrainian crisis, sanctions on Russia and President Putin’s decisions to tighten the laws binding the Internet industry in Russia. The company’s stocks are undervalued now and increase in profits is due to show a positive effect on the shares.

Performance of the Stocks

In a recent research report, Zacks has changed its outlook of Yandex stocks from a neutral rating to an underperforming one. Looking at its first quarter results, the company’s earnings per share of $0.31 is far away from analyst’s estimates of $10.01. However, revenue results for the quarter is more than $80 million than predicted. Analysts thus predict Yandex NV (NASDAQ:YNDX) shares will profit by about $44.57 per share for this financial year.

Put in Sinks Yandex

As Kremlin seems to be more concerned about media and communication industry in Russia, President Vladimir Putin intends to bring in tougher regulations which might directly affect the giant search engine Yandex. The Russian government is considering imposing license requirement for a set of companies whose services are related to mass communications more importantly in Russia. The Russian President has reservations on some moves of Yandex such as having some Americans and Europeans in Management, moving the Headquarters out of Russia mainly to evade tax and activities that Yandex NV (NASDAQ:YNDX) exercises outside of Russia. With the present state of affairs in Ukraine and Sanctions from the U.S and its allies, President Putin is keen to have control over all the mass communication portals to protect his government from any miscommunication inside or outside of Russia.

Servers on Mainland

The Putin’s government no longer wants the search engines to work from outside Russia and wants Internet servers to be based in Russia. Legislation has been passed to this effect by the upper house of the Russian government. This just means it is not lucrative to do business for outside companies in Russia as Kremlin has a virtual control on Internet and the data and content shared on it.

Years Ahead for Yandex

The Ukrainian crisis that had led to the U.S and EU sanctions on Russia has created a weak market. Investors are not spending on advertisements, which is an important revenue driver for a search engine. Yandex NV (NASDAQ:YNDX) has struck deals with Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB), which should increase its revenues. Also, an expected increase in internet penetration to 71% in Russia should decrease the company’s woes of a weak economy and reduced investor spending. The company stocks are valued more than expected earnings this year as analysts expect huge revenues during the next two years and some acquisitions, as well.

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