Yandex shares: to buy or not to buy?

Enabling Yandex shares MSCI index Russia caused a sharp demand for them. The price of securities periodically rewrites historical maximums, trading turnovers are growing. Last Monday, Yandex shares accounted for 60% of the trading turnover of all shares MosBirch index. At the same time, experts speak about overbought securities and high probability of downward technical correction.

Is it worth buying Yandex shares on the correction, or have all the growth drivers been played out and there will be no new wave of highs renewal? Leonid Delitsyn, analyst at FINAM Group of Companies, answered the question posed by Fortrader magazine.

- Yandex shares are rising together with Apple, TeslaWith NVIDIA, PayPal, and Zoom, all of the phenomenal growth is attributable to the half dozen market favorites where all of the positivity is concentrated. The fundamental reasons are different, but all companies are leaders in their respective fields. The principle of "winner takes all" has long been known in the Internet, and now it has gone beyond the Internet. Therefore, all of these companies have good fundamental growth prospects on a 5-year horizon.

As for the game with a planning horizon of a week, you may or may not be lucky. The history of Yandex shares shows that there have been collapses, usually associated with the risk that the company will have to fulfill the tasks of a major partner or serve the country rather than develop in its own interests. Now we do not see any such risks, but some new ones will appear. On negative rumors the price of the securities decreased by 25% and by 36%, however, it took several weeks.

Coronavirus has dropped Yandex's share price by 40%. I would guess that if the stock drops by 25-30%, then within three years, or even a year, the investor who dares to buy it will gain the same order of magnitude. As for the small technical bounces of recent weeks, it's probably possible to make a percent or two, but it's easy to lose them.