Financial Trading Blog
Stock of the day 24/08/2015 – NMC Health PLC
After a pretty stagnant 2014, which saw the stock increase from £4.45 to £4.59 over 12 months, NMC Health initially looked like it was going to continue this fairly lifeless trend, gradually increasing to just over £5 as the end of February approached.
However, news at the end of the month that the company was acquiring an 86.4% share of the Barcelona-based Clinica Eugin, a leading global fertility treatment provider, for €143 million helped lift the stock to new highs. This climb was more than aided by NMC Health’s 12% increase in full year 2014 net profit to $77.5 million alongside a near 17% jump in revenue to $643.9 million.
(Source: IT-Finance.com 24/08/2015)
By the start of March the stock had hit £6.50, a price it lingered at until April, when the news of two more acquisitions impressed investors and put the stock in ascendance. These acquisitions were Americare Group, an in-home healthcare provider in Abu Dhabi, and Dr. Sunny Healthcare, based in Sharjah, bought for a combined total of $100 million. Investors were pleased by the further diversification of NMC’s sources of revenue, and put the stock on track to hit a then all-time high of £8.79 in the middle of May (with the near-omnipresent post-Tory election win boost thrown in for good measure).
Investors, however, weren’t ready to sustain these highs, and a tumble across the second half of May left NMC trading around the £8 mark for the following 6 weeks, with a brief foray to £8.40 in the middle of June based on the announcement of the $160.6 million purchase of the ProVita International Medical Centre, a long term care provider based in the United Arab Emirates.
Things improved by the end of July, as news of NMC Health’s intentions to expand into Saudi Arabia and Qatar, with part of the $325 million the company has earmarked for acquisitions to be spent on new assets in the Gulf region, then pushed the stock to a fresh all-time peak of £9.08. Since then, however, the market-wide China-inspired sell-off hasn’t left NMC unscathed, and the stock has fallen all the way back down to a current trading price of £7.22 (IT-Finance.com, 24/08/2015), a 4 month low.
Yet analysts have remained largely positive on the freely-spending NMC Health, with Investec, Numis Securities and Jefferies Group all reiterating ‘Buy’ ratings on the stock.
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