Yahoo Finance Should You Buy NMC Health Plc (LON:NMC) At UK£035.54?
NMC Health Plc (LON:NMC), a healthcare company based in United Kingdom, received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to £38.12 at one point, and dropping to the lows of £33.38. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether NMC Health’s current trading price of £35.54 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at NMC Health’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for NMC Health
What is NMC Health worth?
NMC Health appears to be overvalued by 38.04% at the moment, based on my discounted cash flow valuation. The stock is currently priced at UK£35.54 on the market compared to my intrinsic value of £25.75. Not the best news for investors looking to buy! In addition to this, it seems like NMC Health’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from NMC Health?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. NMC Health’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? NMC’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe NMC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on NMC for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for NMC, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on NMC Health. You can find everything you need to know about NMC Health in the latest infographic research report. If you are no longer interested in NMC Health, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
