JJC:    It took them a little while but, with 6% GDP growth, the Russians our giving our recessionary economy a daily pants-ing!... The countries of the Warsaw Pact have surpassed us to become the second-greatest capitalists in the world!... Which is why, tonight, I am recommending CTC Media, Inc (CTCM)...

This is the fourth-largest TV broadcasting company in Russia. They own two entertainment channels... CTC, which targets all viewers, from the ages of Six to 54, but tries to be more focused on younger viewers... They've also got a channel for adult women... for the young demo of 25 to the still-young age of 60... It's called Domashny...

In total, CTCM owns 32 TV stations... but, since they have zero news or political programming, the Russian government doesn't care!...

If you want to view CTCM as a traditional media company, it's got strong ratings, but I don't think we should use the same key metrics to evaluate and up-and-coming second world television powerhouse, that we would use to judge our tired old TV business in America.

No, I think CTCM works because of the growing ad market in Russia.  Advertisements may be migrating from TV to the internet here in America...  God, the Soviets... they're just beginning to figure out how to work the clicker!...

They use TV for half of all advertising dollars that get spent in Russia.  They really haven't started feeling the pain of the web yet, let alone DVR's (digital video recorders, like TIVO)...  Think about it... here in America and throughout the Western World, everyone's pretty media-savvy, right?  We're cynical...  Russians... they've only just started to be exposed to real capitalist advertising... something that's 100% necessary in any fast-growing economy, because how else will Russians know what to buy with their new-found wealth?...

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The consensus estimates were 36% growth in Russian TV advertising... that's the polar opposite of the way things are here...

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CTCM has an 11.8% share of the national audience, just with the two stations I told you about before.  In 2000, Russia was 20th in Europe, when it came to advertising spending...  Now, thanks to Russia's new-found prosperity, it's 6th!

Since there's generally a strong relationship between a healthy, growing economy... which Russia and the former Eastern Bloc has...  and the willingness of advertisers to spend money... 

The Soviet Union may have broken up but, at least when it comes to the airwaves, CTCM seems to be aggressively trying to put things back together...

They bought 60% of the largest TV network in Kazakhstan... Channel 31... It's got a 7% share... where they've taken over management... and re-launched the network this month.  Like Russia, Kazakhstan is brimming with oil wells, and its people just need television, so they can watch the advertisements and know what to buy.

CTCM is launching a TV company in Uzbekistan too, in the 2nd quarter, in order to capture that coveted Uzbek demo...

And maybe the best acquisition yet to come is of DTV... that's the men's entertainment channel in Russia, with a 2% audience share... a deal that should close in the 2nd quarter.  CTCM should be able to aggressively cut costs, as DTV's operating margin is much lower than CTCM's 41% operating margin.  The savings are going to be gigantic.

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This thing is just a really good story...  It's like America 40 years ago.

CTCM brings DTV in line with other channels.  I also think that this post-Soviet is ridiculously underpriced...  Get this...

I sat down all day, trying to figure out what stocks in this country have 30% long-term growth, other than Potash (POT) and Mosaic (MOS)...

CTCM has a 30% long-term growth rate... something that's increasingly-rare in our diseased economy... and it trades at a mere 18x expected 2008 earnings.

I believe this stock - like many in the region - is getting a discount, because too many people still think of Russia, and its neighbors, as broken second-world countries.   I call it the Brezhnev discount...

I don't think that will last, as people come to realize that the former Soviet Union and its satellite states, are growing... and a pure-play on ad spending on Russia and its neighbors, like CTCM is a great buy...