Russia may want to act like the top-down approach of the Soviet-era is a thing of the past, however this nation shares many of the same problems with China in regards to government interference and corruption.
But in contrast to China, the growth isn’t as impressive. Russia’s economy is projected to grow about 2.6% after a pretty weak 1.5% expansion in GDP for 2013.
So why buy Russia?
Well, because the BRICS have been pretty much left for dead lately. As a result, Russian stocks on U.S. exchanges typically have a forward P/E of about 11.3 and trade at or slightly below book value.
And when you talk about untapped potential, Russia could be one of those regions like China that sees explosive growth once it manages to leverage its massive population and resources in the right way.
This pick is even riskier than China, so your best bet is the diversified Market Vector Russia ETF (RSX).
But if you want to roll the dice on a risky but high-reward play, consider telecom giant Yandex (YNDX). This company is actually based in the Netherlands, but operates the leading Russian web portal, with search and email services. It’s essentially the Google (GOOG) of Russia.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at email@example.com or follow him on Twitter via @JeffReevesIP.