NMC Health Plc (lon:nmc)
NMC Health – Are Muddy Waters Correct?

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

Commentary History
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NMC Health Plc Share Price
Grade:No grade has been assigned to this company
Title: NMC Health – Are Muddy Waters Correct?
Company: NMC - NMC Health Plc
Share Price Then: 1729p
Author: Ian Smith
Date: Thu 19 Dec 2019
Comments: 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.
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