NMC was the worst performing FTSE 100 stock in 2019. Should I buy it?

first_imgNMC was the worst performing FTSE 100 stock in 2019. Should I buy it? I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Simply click below to discover how you can take advantage of this. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! “This Stock Could Be Like Buying Amazon in 1997” Jonathan Smith | Tuesday, 7th January, 2020 | More on: NMC Now that 2019 has come to a close, taking stock of both the good and the bad can give us various lessons to take forward into 2020. I have already written a piece looking at the star performer from the FTSE 100 index last year, which you can read here.However, it is also worth reviewing the worst performer, and seeing what we can spot to avoid when making investment choices this year.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Firstly, it is actually quite hard to pinpoint the specific ‘worst performer’ as the FTSE 100 relegates companies that have a sharp drop in the share price (and thus the market capitalisation) down to the FTSE 250 on a quarterly basis. For example, Marks and Spencer was in the FTSE 100 at this time last year, but dropped out in Q3. Then there is the issue of whether to include dividends in the performance, or the exact date range we choose.To keep it clean, I’ve used the numbers of the companies that were in the FTSE 100 for all of last year, to give a fair comparison. In this case, the wooden spoon goes to NMC Health (LSE: NMC). It is the largest healthcare provider in the Middle East, but also has a network of hospitals in Europe.This time last year it was trading at 2,620p, and opened in the New Year at 1,800p. This is a fall of some 31.3%.What happened here?Taking the performance over an annualised period as we have done usually smooths out a bumpy road, but not so for NMC. For most of last year, the share price was fairly muted. If you had checked your portfolio containing NMC in May or September then it would have shown you a profit (assuming you bought it at the start of 2019). The real kick in the teeth that saw it take the booby prize came just last month. The share price dropped by almost 50% following a report about the validity of the company’s financial statements from Muddy Waters. Muddy Waters calls itself a “due diligence based equity research” firm, and has been in the news previously for questioning or exposing company practices. The firm claimed that NMC had potentially overpaid on acquisitions, inflated its margins and understated reported debt. The market reacted fast, with the share price yet to make a meaningful bounce back.Should I buy it?At the moment, I do not believe that retail investors such as myself have enough information on what is true or not. NMC called the report by Muddy Waters “false and misleading” and has opened its books for independent review. If the business has nothing to hide, then sure the current share price makes it cheap on a relative basis if the company is actually in good financial health.However, if NMC does have problems (Muddy Waters claim it has understated debt of $320m as of 2018) then this could be a serious can of worms that could see the share price tumble further. On balance, without more publicly available information, buying into NMC seems more of a gamble than an investment to me at the moment. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.center_img Our 6 ‘Best Buys Now’ Shares Jonathan Smith does not own shares in NMC Health. 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. 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