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Sozzi: The Next Cold War Could Pummel these Corporate U.S. Forces

NEW YORK (TheStreet) -- Welcome to ugly town. Russia has already liquidated $100 billion of U.S. Treasuries ahead of potential Western sanctions due to Crimea chaos. Further, the land of bear wrestling Putin has warned that it will pass a bill to freeze the assets of European and American companies that operate in Russia. Wowzers.

Believe you me, over the next couple of weeks you will hear more talk about the next Cold War. It doesn't take a Ronald Reagan historian to know this would be bad news for investors that have portfolios weighted in global companies. My humble view is that investors have gotten too complacent on geo-political risks, and are in for a rude awakening on this Russia vs. the West issue as Russia is frequently pitched by execs as a fast-growing market that is getting more investment dollars.

Here are two examples of companies that could be hurt by the rising tensions.

  • Nike (NKE - Get Report) has 99 stores in Russia, 57 of them factory stores. In 2013, revenues from Russia rose a cool 28%. BTW, Nike also designed the jerseys for the Russian Ice Hockey team, and is supposed to be a major player for World Cup 2018, which will be held in Russia.
  • Yum! Brands' (YUM - Get Report) KFC segment has 250 restaurants in Russia, with plans to raise that total to 400 by 2015. In the past two years, KFC Russia has had the highest same-store sales growth rate for the brand globally.

All of this is scarier than Ivan Drago in Rocky 4, that is for darn sure.

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-- By Brian Sozzi CEO of Belus Capital Advisors, analyst to TheStreet

At the time of publication, Sozzi held no position in the stocks mentioned.

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