X5 Retail Group - Closing Our Trade Idea

Having concluded that all of the headwinds and negative news flow had passed, in October we suggested buying X5 Retail Group. The trade idea delivered positive results: the stock advanced 6.7% to $35.21 per GDR, outperforming the RTS Index by 1.9 pp. We have decided to close our trade idea. That said, we remain upbeat on the company's long-term fundamentals and maintain our BUY recommendation on the stock.INVESTMENT CASEIn October, we suggested buying X5 Retail Group, and the trade idea delivered good results. As we had expected, the stock advanced amid an absence of negative news flow. X5 remains the fastest growing listed food retailer in Russia, and we do not see any notable company-specific risks. The stock is trading at low multiples and also provides a 5.1% dividend yield. We remain upbeat on the company long-term. PERFORMANCE AND WHAT'S IN THE PRICESince we published our trade idea, the stock has advanced 6.7% to $35.21 per GDR, outperforming the RTS Index by 1.9 pp. We are closing our trade idea, as the stock price has risen. The performance in the near future is likely to be driven mainly by the overall stock market dynamics, though solid 4Q19 results could support the price. Our view on the company's long-term fundamentals remains positive, and we maintain our BUY recommendation on the stock.