Here, I’ll look at what this means for those who own NMC shares. I’ll also highlight two red flags that could have helped investors see this coming.

NMC Health in administration

When a company goes into administration, it’s taken under control by a licensed insolvency practitioner (the administrator). The ultimate objective of the administrator is to decide whether the company has the potential to trade successfully again – possibly after financial restructuring – or whether its problems are insurmountable.

If the latter, it will need to be ‘liquidated’, which means dissolved completely. While in administration, the company can continue to operate. However, it will have protection from creditors, who may be threatening legal action over outstanding debt.

In NMC’s case, Abu Dhabi Commercial Bank – which is owed almost $1bn by the company – pushed for administration. It feared NMC would be unable to pay employees in the months ahead and that the whole company may collapse.

Bad news for shareholders

For company shareholders, going into administration is generally very bad news. This is due to the fact that, if the administration involves a sale of all or part of the company’s assets to pay off creditors, shareholders are last to receive anything. They rank behind bond holders in terms of priority. Most of the time, they end up receiving nothing.

Looking at NMC Health, it’s too early to know if shareholders will get anything back. However, my personal view is it’s unlikely. I say this because, last month, investigators discovered the company had undisclosed debt of $4bn, taking its total debt to over $6.5bn. This is far higher than the assets and equity on the company’s books at 30 June.

NMC Health shares: two red flags

Looking back, there were certainly a few red flags here that could have helped investors avoid this mess.

For a start, there was the short attack by research firm Muddy Waters in December. In a highly critical 34-page report, Muddy Waters said it had “serious doubts” about NMC’s financial statements and that it believed NMC had “manipulated its balance sheet to understate debt.”

Whenever a company gets attacked like this, it pays to be very careful. This is because you can be sure the shorter has done their research. Looking back, Muddy Waters’ research was on the mark, as NMC understated its debt massively.

Secondly, earlier this year, a number of insiders at the company, including founder and chairman Bavaguthu Raghuram Shetty and vice-chairman Khalifa Al Muhairi, offloaded a huge number of NMC Health shares. Between them, they sold nearly £200m worth of shares in January and February.

Insider selling is not always a bearish signal. There are plenty of legitimate reasons for insiders to sell shares. However, in this case, the selling certainly didn’t look good, given the doubts over the group’s balance sheet.

Had investors sold NMC Health shares on spotting these red flags, they may have been able to protect their capital.

The post NMC Health has gone into administration. Here’s what that means for those who own the shares appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Edward Sheldon has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended NMC Health. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Like an arrow

Aviation services and distribution group Dart (LSE: DTG), the holding company behind consumer facing names such as short-haul airline Jet2.com and operator Jet2holidays, is up a whopping 401% over the past five years, and there has been no slowing down lately with the share price climbing 48% in the past 12 months.

That is remarkable growth, especially when you consider the problems affecting so many in the travel industry, with Thomas Cook going bust, and the likes of Ryanair and easyJet giving investors a bumpy ride.

The Dart share price jumped on Thursday after it published a positive set of interims, showing a 16% rise in revenues to £2.6bn, with operating profit up 3% to £365m.

Sunny outlook

The travel industry is risky, as fuel prices and foreign exchange rates are beyond individual company control, as are climate change and consumer sentiment. However, the £2.5bn FTSE 250-listed group continues to generate plenty of net cash, £512.5m in the first half, a rise of more than 15% year-on-year. Management increased the interim dividend by 7% and there should be scope for plenty of progression, as the current yield of just 0.9% covered eight times by earnings.

My major concern is that recent dramatic earnings growth (39% and 36% in 2018 and 2019 respectively) looks set to slow, with a drop of 5% expected this year. Although earnings are expected to return to growth in the year to 31 March 2021, this is forecast to be a more modest 6%.

Fortunately, and perhaps surprisingly, the stock trades on just 13.7 forward earnings – I expected a pricier valuation given recent dramatic growth rates. Dart is unlikely to soar another 400% in the next five years, that would lift its market to a mighty £12.5bn after all, but it may still continue to fly.

In rude health

Private healthcare provider NMC Health (LSE: NMC) is based in the UAE but listed on London’s FTSE 100, and has posted impressive growth of 341% over the past five years. However, the last 12 months have been poor, with the share price down almost 40%, amid concerns that its acquisition strategy has driven debt to dangerous levels and threatened the balance sheet.

Another concern is that NMC been slow to collect payments, taking almost a hundred days on average to bank customer bills. However, recent results showing 33% revenue growth and 30% bottom-line improvement have eased some worries.

On the table

In August, the stock soared 38% in a day, after two groups tabled competing bids to buy a £1.5bn stake in the company, one of them Chinese investment group Fosun. I am always wary of buying on speculation and with little subsequent news, and NMC Healthcare share price has trailed down.

The £5.16bn group, which operates a network of private hospitals in 19 Gulf countries, looks a little pricey trading at 20.2 times forward earnings. On the other hand, it has posted an impressive five consecutive years of double-digit earnings growth to 2018 (including 55% in 2016), and City analysts are forecasting another 13% this year and 28% next. It’s not often you see that these days.

Again, the yield is low, at 0.9%, but cover at 5.5 times earnings gives scope for progression. The recent share price decline could offer an interesting opportunity to buy into this long-term growth story.

The post These 2 stocks are up more than 350% in five years, and here’s why I’d buy them appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended NMC Health. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Its supporters argue it’s the biggest growth bargain in the top index. Its critics reckon it’s a disaster waiting to happen. Rarely has the old saying ‘it takes two to make a market’ been so amply demonstrated. Here, I’ll discuss the bull and bear cases, review today’s results, and give my view on its valuation and prospects.

Fiasco

The market’s sensitivity to the divided opinion on NMC was displayed earlier this month when its shares fell sharply on Tuesday and Wednesday 6/7 August. Renowned US short-seller Muddy Waters tweeted on Tuesday it would announce a new short position the following day, “on an accounting fiasco that’s potentially insolvent.”

It seems some in the market suspected NMC was the company in question. However, it transpired on Wednesday that the target was AIM-listed litigation funder Burford Capital. Despite this, and a statement by NMC on Thursday that “trading in the business remains in line with management expectations,” its shares ended the week 16% down from where they were at the start.

Bearish

Disclosed short positions in NMC have steadily risen over the past nine months from 0.5% to 5.4%, ahead of today’s results. While this is some way below the most heavily-shorted London stocks — Kier (11.9%), AA (9.5%) and Thomas Cook (9.3%) — it nevertheless represents a fairly substantial bet against NMC (by four separate hedge funds).

My colleague Roland Head has previously highlighted two of the points in the bear case. Namely, the company’s high level of gearing and the length of time it takes to collect payment on customer bills. Indeed, cashflow generation generally is one of the more prominent matters highlighted by bears as an issue.

Bullish

NMC is evidently acutely aware of the bear criticisms. The ‘Key Highlights’ that headed today’s results included: “Working capital cycle days reduced substantially, supporting one of the highest EBITDA-to-Free Cash Flow for H1 in the history of the company,” and “delivering balance sheet strength, with net debt-to-EBITDA improving.”

Reporting 33% revenue growth and 30% bottom-line growth for the first half of the year, NMC is on track to meet full-year expectations. The company added it believes its growth strategy “will continue to create significant value for shareholders over the long-term.”

New development

The shares soared as much as 42% in early trading this morning. The results were good, but not that good. The reason for the leap was a report from Reuters yesterday evening that two groups, including one backed by China’s Fosun, have made competing offers to buy a 40% stake in the company.

The shares have fallen back somewhat from the early spike, and are trading 27% up on the day at around 2,400p, as I’m writing. Nevertheless, they remain far below their 52-week high of near to 4,000p. At 19 times forecast full-year earnings, with annual growth expected to average over 20% for the foreseeable future, the stock looks good value on paper.

I think the company is moving towards addressing and satisfying the bear issues, rather than being sunk by them. On this basis, I tentatively rate the stock a ‘buy’.

The post FTSE 100 stock NMC Health has just jumped 24%. Here’s what I’d do appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended NMC Health. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Healthcare services

In the oil-rich nations of the Gulf Cooperation Council, the FTSE 100’s NMC Health (LSE: NMC) operates as a private healthcare provider. The company has been growing fast both organically and via acquisitions while throwing out some decent-looking annual advances in the numbers for revenue and earnings.

Over the past five years, revenue has shot up almost 300% and earnings have moved around 285% higher. Over that period, shareholders have enjoyed a more than 400% advance in the share price at today’s 2,491p. The shares did go higher than 4,000 in the summer of 2018 but have since dropped back.

I think the correction is a good thing because it takes some froth out of the valuation. Big growth stories like this tend to attract wide attention from investors, and part of the rise in the stock happened because of a valuation up-rating. Indeed, NMC was priced for growth.

And growth remains firmly on the agenda. City analysts following the firm expect earnings to advance by percentages measured in the high twenties to early thirties this year and next year. Back in March in the full-year results report, chief executive Prasanth Manghat said the company “remains ideally positioned to capitalize on growth opportunities in its key markets.”

Meanwhile, we can pick up a few of the shares on a forward-looking earnings multiple for 2020 of just over 15. Given the growth on offer, that valuation works for me, and I’m tempted to slip a few shares into my retirement portfolio to hold for the long term.

Paper-based packaging

In today’s world, it’s hard for me to imagine the demand for paper-based packaging drying up, which is one reason I’m keen on the FTSE 100’s Smurfit Kappa Group (LSE: SKG). The company’s website explains that the firm is a big producer of corrugated packaging, containerboard and ‘bag in box’ in Europe, and is the only “Pan-American” producer of containerboard and corrugated packaging.

Over the past five years, revenue has grown around 15%, but the company has managed to squeeze out a more than 100% rise in earnings. Shareholders have been rewarded for the firm’s success with a lift in the dividend of about 85% in the period. On top of that, the share price trades just over 100% higher than it did five years ago.

In May, chief executive Tony Smurfit said in a trading update: “While there is invariably political and economic risk, we confidently expect to deliver another year of progress.”

We’ll get a further update regarding the outlook with the half-year results due on 31 July. Meanwhile, the shares trade with a forward-looking earnings multiple just over 10 for 2020 and the anticipated dividend yield is around 3.7%. I’m tempted by the stock.

The post 2 FTSE 100 stocks I’d buy for my ISA right now appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended NMC Health. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Takeaway profit

Online takeaway ordering service Just Eat (LSE: JE) is a leading player in this sector, with operations overseas as well as in the UK. But the firm is without a permanent chief executive, after former boss Peter Plumb departed suddenly in January after just 15 months in the job.

Plumb’s unexpected departure doesn’t fill me with confidence in the outlook for the firm. Indeed, several things worry me about this business.

Competition in this sector is rising fast. Companies such as Uber Eats and Deliveroo are changing the market. I think Just Eat’s profit margins could suffer in this environment.

Indeed, the firm’s profit margins aren’t that high to start with. In 2018, its operating margin was only 14%, which is much lower than dominant online marketplaces such as Rightmove and Auto Trader.

At about 640p, Just Eat shares trade on around 75 times 2019 forecast earnings. Analysts expect profits to double in 2020, but I’m not sure how confident we can be in such bold forecasts. In my view, the current share price carries a significant risk of disappointment.

Unhealthy figures?

Middle East private healthcare group NMC Health (LSE: NMC) operates a network of private hospitals in 19 Gulf countries.

Since floating on the London market in 2012, NMC has grown rapidly, helped by a string of acquisitions. However, this growth has come at a price. At the end of 2018, net debt was about $1.5bn, or 3.1 times earnings before interest, tax, depreciation and amortisation (EBITDA). That’s well above my preferred maximum of 2.0x.

I’m also concerned that, on average, it took the company 96 days to collect payment on customer bills last year. That seems high to me.

Adjusted earnings per share are expected to rise by about 23% in 2019, which may help to justify the stock’s price tag of 18 times forecast earnings. Personally, I think this business looks expensive when its debt burden is factored in. I think there are better choices elsewhere in the healthcare sector.

Fancy a flutter?

When bosses at Paddy Power Betfair decided to rename the group Flutter Entertainment (LSE: FLTR) earlier this year, they were hoping to resolve confusion about the group’s numerous different operating businesses. These include UK bookmakers, online sports betting, and European and US gaming activities.

Flutter’s UK profits took a hit last year, when new regulatory restrictions on fixed-odds betting terminals (FOBTs). Chief executive Peter Jackson is hoping to reignite growth by expanding in the US as sports betting is gradually legalised.

He’s also taking a punt on more lightly-regulated emerging markets — recent deals have included the acquisition of a betting company in Georgia.

In my view, this strategy carries a fair amount of risk. Competition will be intense in the US market and many states have yet to legalise sports betting. Regulation can also change unexpectedly in emerging markets.

Flutter shares currently trade on 19 times 2019 earnings and offer a yield of just 3.3%. That makes them more expensive than most rivals. I don’t think this premium is justified. I’d place my bets elsewhere in this sector.

The post 3 FTSE 100 stocks I’d sell today appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Auto Trader, NMC Health, and Rightmove. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The first is FTSE 100 private healthcare group NMC Health (LSE: NMC). It’s the leading operator in the Gulf Cooperation Council region, whose member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The second is MP Evans (LSE: MPE), a well-established producer of palm oil in Indonesia.

Price pain but profitable

In its annual results, released today, MP Evans reported a 32% increase in crops to 573,000 tonnes, and record production of crude palm oil — up 25% to 192,500 tonnes. Meanwhile, costs were down by 14% to $320 per tonne of palm product.

However, one thing outside the company’s control is the price of palm oil. Record production and reduced costs could not outweigh a year of significantly lower palm-oil prices in 2018. The company remained profitable, but profit from continuing operations fell to $7.2m from $27m in 2017.

The share price was down as much as 10% to 620p in early trading, but has recovered to 652p (down 5%), as I’m writing. This represents a whopping 86 times today’s reported earnings per share (EPS) of 9.9 cents (7.6p at current exchange rates). However, the outlook for 2019 and beyond is much brighter. And this gave the board confidence to maintain the 2018 dividend at 17.75p (running yield 2.7%).

Rising earnings ahead

The palm oil price has recovered from a low point of $440 per tonne in the middle of November to $520 per tonne at the end of March, and the futures market is anticipating significant further price increases to come.

Ahead of today’s results, forecast EPS for 2019 stood at 42 cents (32p), rising to 54 cents (41p) for 2020. So on a forward basis, we’re looking at 20.4 times EPS, falling to 15.9 times. This is a well-managed business, with many years of increasing production ahead, and I rate the stock a ‘buy’ at the current price.

Multi-year growth story

There was no annus horribilis for NMC Health in 2018. The company delivered another year of record revenues and profits. EPS growth to 133 cents (102p) was in line with its four-year annual average of around 30%. Strong growth is set to continue, with EPS of 177 cents (135p) forecast for 2019, followed by 219 cents (167p) for 2020.

A current share price of 2,420p represents 17.9 times forecast 2019 EPS and 14.5 times 2020’s. Meanwhile, a running yield of 0.75% on a dividend of 18.1p is set rise strongly in the coming years, with the payout tracking the rapid growth in EPS.

NMC is another well-run business, and management has a record of under-promising and over-delivering on guidance. The company’s unmatched geographic reach within its target markets, and significant lead over others in the diversity and complexity of its medical services, are strong competitive advantages. I see another multi-year growth story here, and another stock I’d be happy to buy today.

The post I’d buy this Brexit-proof FTSE 100 stock for my ISA today appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended NMC Health. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Right now the likely path to Brexit remains as clear as mud and so I feel it’s a good time to discuss more blue-chips that could thrive irrespective of the UK’s future relationship with the EU27 and how this impacts the domestic economy.

Record breaker

The crisis in the National Health Service means that demand for private healthcare has ballooned in the UK in recent years, but the economic implications that a damaging Brexit would probably have on citizens’ spending power means that these bright growth rates could be in jeopardy.

This is where NMC Health (LSE: NMC) comes in. Sure, it’s a major player in the private healthcare sector, but its hospitals can be found in the United Arab Emirates. And thanks to a combination of growing personal wealth levels and the Footsie firm’s expansion in these faraway lands, I’m confident that it can keep on thriving.

NMC put in another year of record sales and profits in 2018, and City analysts are expecting another stunning earnings rise in 2019, this time by 33%. It’s why they also expect dividends to keep surging, with an anticipated reward of 32.6 US cents per share up from 18.1 cents last year and yielding a handy 1.1%.

BIG yields

If you’re looking for bigger dividends then you might want to give International Consolidated Airlines Group (LSE: IAG) a close look.

City consensus suggests that the British Airways owner will experience a rare earnings dip in 2019 in reflection of the ‘fare wars’ raging across the European budget segment and rising fuel costs more recently: a 5% bottom-line reversal  is currently anticipated.

Despite this, IAG is expected to still raise the full-year ordinary dividend to 32 euro cents per share from 31 cents in 2018, resulting in a chunky 5.3% yield. Even if the business doesn’t pay more special dividends like it did last year, there’s still plenty for dividend hunters to sink their teeth into.

Flying high

I’m confident that the long-term earnings outlook remains bright, and that City brokers will keep predicting dividend growth long beyond the near term. Full-year results released late last month reinforced my positive take as well. Despite fuel costs rising by almost a third in 2018, plus damaging currency movements and air traffic strikes in France, group operating profit (before exceptionals) rose 9.5% to €3.2bn.

Now of course a painful Brexit could have an impact upon IAG’s operations given the likelihood that consumer appetite for big-ticket items like holidays could fall. But the UK remains a very small part of the profits pie for this Footsie firm. And as the company bulks up its route network and its fleet, a strategy which pushed passenger numbers 6.1% higher year-on-year in March to 7.5m, it’s reducing its reliance on its home territory and establishing a base for excellent long-term profits growth. Like NMC, I reckon the flyer is a great pick for all long-term income investors.

The post Scared of Brexit? Prepare for the worst with these FTSE 100 dividend stocks appeared first on The Twelfth Magpie.

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• 2 cheap FTSE 100 stocks that have P/E ratios below 10
• What might Middle Eastern peace mean for the IAG share price?
• Up 119% but with a P/E of just 6.6% – what’s going on with the IAG share price?
• 3 UK stocks to consider snapping up if the stock market crashes this month

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended NMC Health. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In August 2018, the share turned around and began to dive, almost as gracefully as it had previously risen. The recent share price around 2,792p is more than 30% below the peak achieved last summer – ouch!

More barnstorming results

But today, the private healthcare services provider released another set of barnstorming results, proving that, operationally, nothing is different. Revenue and adjusted earnings per share both shot up more than 28% during 2018 – I wish some of my small-cap investments put in growth numbers like that, never mind this ‘lumbering’ big-cap elephant. The directors seem relentlessly positive and pushed up the final dividend for the year by more than 39% as if to prove it.

My view is the key to the firm’s success is it serves oil-rich nations and wealthy individuals in the Gulf Cooperation Council (GCC) and owns hospitals in 19 countries in the region. On top of that, NMC claims to be “one of the top 3 in-vitro fertilisation (IVF) operators globally.” The firm said in the report organic growth ran at the rate of around 15% in the period, with the rest achieved via acquisitions. During 2018, the firm spent around $553m taking over other businesses and just over $225m purchasing “outstanding minority stakes in Fakih IVF and As Salama Hospital.” 

The company has been pursuing an “aggressive” international expansion programme since 2016 and sees the Kingdom of Saudi Arabia as a key growth market. A big chunk of operations are sited in the firm’s home market of the United Arab Emirates (UAE) right now, so the geography is convenient. In 2018, NMC pushed further into Saudi Arabia and expanded its IVF platform into the USA and Africa. It also enhanced its capabilities in the area of cosmetics with the acquisition of a company called CosmeSurge.

A bullish outlook

Trading in 2019 is off to a good start and chief executive Prasanth Manghat said in the report the firm’s strategy revolves around building capacity and capability along with geographic expansion. The company is riding a wave of “sustained economic expansion” in its core markets. Manghat cites the Institute of International Finance forecast for 3.1% GDP growth in the UAE for 2019, as an example.

He also explained the healthcare sector is “a key focus” for governments in the firm’s operating regions. Promotion of private participation in healthcare is “a common theme across all these countries.”  NMC aims to target segments where governments are “most keen to find private sector partners.” 

The outlook is bullish. Yet you can pick up a few NMC shares on a forward-looking price-to-earnings ratio of around 16 for 2020. Meanwhile, City analysts’ projections for annual earnings increases above 20% seem to keep on coming. I’m bullish on the shares.

The post This could be the FTSE 100’s most rampant growth share, and it’s on sale! appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended NMC Health. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

There’s no doubt the short-term outlook for many of Europe’s low-cost carriers is pretty murky at the moment. However, easyJet is a share which, while also seeing its profits suffer in an environment of cheap tickets, enduring sterling weakness and rising fuel costs, can look forward to still delivering great growth in the years ahead as it boosts capacity and expands its route network.

It’s these twin factors that helped passenger numbers sail 15% higher between October and December to 21.6m, even in spite of drone-related disruptions at its key London Gatwick hub in the period. And it’s why City analysts expect the FTSE 100 flyer to recover from an anticipated 3% earnings drop in the year to September 2019 to punch a 7% bottom-line rise next year.

At current prices, easyJet offers great value for money through its forward P/E ratio of 11.4 times and its huge 4.5% corresponding dividend yield.

Say aaaah

Another great Footsie stock that can be picked up for next to nothing is NMC Health (LSE: NMC). Its prospective P/E ratio of 20.2 times may not be anything to write home about, but a corresponding sub-1 PEG reading of 0.7 — created by City analysts predicting a 27% profits rise in 2019 — certainly is.

Annual earnings growth at the business, which provides private healthcare predominantly to clients in the Middle East, has long clocked in at double-digit percentages and the number crunchers are predicting this trend will continue long into the future (another 23% profits rise is predicted for 2020, incidentally).

And why wouldn’t the Square Mile be so upbeat? A combination of rising personal wealth levels and spreading insurance cover promises to keep demand for private healthcare services rising, and NMC is investing heavily to exploit these joint trends. Indeed, it has big plans for the new healthcare company its creating in Saudi Arabia with Hassana, and it plans to supercharge the number of beds it operates from 1,500 at the beginning to around 6,000 within five to 10 years.

Piping hot

Considering its exceptional prospects in lucrative foreign markets NMC could, then, be considered particularly cheap at current prices. And I believe the same can be said for Ferguson (LSE: FERG).

As I type, the plumbing and heating product distributor sports a forward P/E ratio of just 13.4 times (and a corresponding PEG multiple of 0.8) and, given the rampant progress it’s making in the US, I reckon this is far too cheap. City forecasters are anticipated earnings rises of 18% and 5% in the years to July 2019 and 2020, respectively.

Indeed, with the Federal Reserve curbing its previously-hawkish tone concerning monetary policy, the outlook for the North American economy has improved vastly in recent weeks and improved the already-great revenues picture at Ferguson.

The business saw organic sales in the US swell 9.6% between August and October, and I’m expecting another bubbly statement when half-year numbers are released in a month’s time (on March 26, to be exact), a release that could spur more heady share price gains. It’s a great share to buy today and hang onto for many years, in my opinion.

The post Have £3,000 to spend? I think these 3 FTSE 100 stocks are far, far too cheap! appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended NMC Health. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Personally, I don’t like to take too much risk with my money. I like companies that have a proven track record of creating value for investors, that operate in defensive industries such as healthcare.

That’s why my first pick is Abcam (LSE: ABC).

World leader

If you’ve never heard of it before, you’re probably not alone. The company flies under the radar of most investors, but that doesn’t mean it’s any less attractive. The business sells antibodies and research tools to life-science groups, a highly specialist and unique industry. 

It has carved out a niche for itself in this market over the past two decades, and while the journey hasn’t been easy, investors who stuck with the business for the tour have seen impressive returns. After going public at around 42p per share in November 2005, today the shares are changing hands for 1,140p, a compound annual return of 19.3% according to my figures.

And it doesn’t look as if it is going to slow down anytime soon. Management believes the company can maintain double-digit revenue growth in the medium term as demand from the world’s ever-growing healthcare market remains robust.

Opportunity to buy 

Back in September, management announced that the company would be increasing the amount it spends on research and development to make the most of the opportunities it has available to it. Unfortunately, the market took a dim view of the decision because it means profit margins will fall slightly (analysts are expecting a contraction in the firm’s EBITDA margin of 3%). The shares have slumped 25% over the past four months following this news.

However, I think this presents an opportunity for investors to acquire shares in a world-leading, defensive business at a favourable valuation. If you are looking for stocks to include in your portfolio, I think Abcam is indeed worth a closer look.

Explosive growth

The second stock I’d buy with my £5,000 fund is NMC Health (LSE: NMC). Once again, this is a healthcare business that has generated impressive returns for shareholders in the past and looks set to continue doing so. 

This company, which operates private healthcare facilities across the Middle East and in several other attractive markets around the world, has produced a total return for investors of 45% per annum over the past five years.

I see no reason why this trend cannot continue. In October last year, the group surprised the market by announcing growth for 2018 would surpass expectations with revenue rising 24% and EBITDA jumping 36%. New facilities in its key UAE market, coupled with the acquisition of Aspen Healthcare — one of Britain’s biggest private hospital providers — are responsible for the improved growth.

City analysts believe the expansion will continue into 2019. They’ve pencilled in earnings per share growth of 29% for 2019, and they also reckon the company will reward investors with a 30% increase in its modest dividend distribution to $0.32 per share, a yield of around 0.9%.

Right now, shares in the hospital provider are expensive, but I think it is worth paying a premium for the growth the business offers. The stock is trading at a forward P/E of 25.6, falling to 19.7 for 2019.

The post Don’t know where to start investing? Here’s how I’d invest £5,000 today appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended NMC Health. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.