NMC Health Plc (lon:nmc)
NMC Health – Is It Day Trade Only Share Now?

NMC Health Plc Financials

ItemCurrent PeriodPrevious Period
Year20182017
Period12 Months12 Months
Revenue£2057m£1603m
Earnings
Adjusted Earnings
EBITDA£487m£353m
Adjusted EBITDA
Statutory Profit
Adjusted Profit£283m£236m
Total Debt
Net Debt£1892m£1316m
NMC Health Plc Share Price
Grade:No grade has been assigned to this company
Title: NMC Health – Is It Day Trade Only Share Now?
Company: NMC - NMC Health Plc
Share Price Then: 1275p
Author: Ian Smith
Date: Wed 08 Jan 2020
Comments: When Muddy Waters first released their comments I started to follow
NMC, before that they had never interested me.

I didn’t fully believe that MW were correct but certainly believed that they had to be pretty close to correct when the law suits didn’t start flying.

I did buy some shares on the 20th Dec (2019) and sold on the 23rd Dec on the basis that they had hit the low caused by the report and I didn’t want to be holding them when the novelty wore off and possibly MW turned out to be correct.

So today’s and yesterday’s drop from 1,800p to around 1,250p was not unexpected, but I was surprised when the two main share holder’s were reported as selling off a 15pc stake at 1,200p.

Given the MW report and the fact that the share price hasn’t been as low as 1,200p since mid 2016 it is inevitable that people may see this is getting out before more bad news. So why were the shares sold, surely the reported reason that the money was needed to repay debt is going to be questioned?

Does this mean that the share is now only suitable for day trading?
Even this seems too risky for me as an announcement during the day may be made or rumours of one may leak out.
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Previous Commentaries On NMC Health Plc
Date Share Price Author Commentary
Thu 19 Dec 20191729pIan Smith

NMC Health – Are Muddy Waters Correct?



Muddy Waters have just released an analysis of NMC Health which has caused a big drop in the share price so is this an opportunity for some easy gains or a trap that could see you lose all of your investment?

At first glance NMC looks attractive, they were admitted to the London Stock Exchange in 2012 and have a current market cap of around £3.6bn and operate in 19 countries around the world, including Jordan, Kuwait, Oman, Kenya, the USA, Brazil and the UK and have 18,000 staff in 189 locations.

That’s the PR blurb, their main focus though is the UAE and other GCC (Gulf Co-Operation Council) countries.

So are Muddy Waters right? Having followed Burford Capital since a report from Muddy Waters trounced their share price, basically halving it in Aug 2019, and the lack of a defence from Burford that has forced any form of back tracking by MW I have to believe that MW’s report on NMC is fundamentally sound.

Like Burford, NMC haven’t responded immediately beyond a “no news here” statement, this is slightly worrying as the accusations in the MW report are pretty problematic for nearly everyone who is a shareholder.

However it is worth noting that there are three individuals who each hold roughly 20% of the company's shares, almost 60% in total.

If NMC’s share price follows the same pattern as Burford's then the NMC share price will stay at today’s level of around 1,700p for a while, Burford has not yet recovered.

The current price could be seen as offering a possible 50% growth back to the typical 2019 price of around 2,400p or a drop of another 50% as this was just a “bubble” share and even if the MW report is wrong or insignificant 1,200p gets you back to a reasonable P/E.

If the MW report is correct then it is hard to see where the bottom is for the price as investors may be spooked even though there is still a big health care business generating a lot of income.

The financials shown here are in USD.