Member Info for alwayswrong

That was a good find invester....their analysis is robust providing of course that the numbers published by NMC are true and fair, which I think they are, but time will tell..

In Africa and other parts of the world , there is a serious health risk of drinking from muddy waters in case they are contaminated ..

In the investing world there isn't a serious health risk from drinking up the contents of Muddy Waters reports but there is a serious wealth risk...

Let me explain the concept of hedge fund shorting because not everyone on the board may be familiar with it..

Large Hedge funds make serious amounts of money by "borrowing " significant amounts of shares held by pension funds , investment funds and other institutions, who hold these shares on our behalves within our pension funds etc..

They choose large companies with ample liquidity of their shares traded. . ...upon borrowing these shares they sell them discreetly in bundles, on the exchanges...let's say in NMC's case at say £30 per share..

Once they have discreetly sold all of these shares, they trail and promote a message that they have taken out a short on the company in question , usually one that has already shown signs of vulnerability...They then issue a report making damaging accusations, based not on fact , but on questionable assumptions ..this report is heavily trailed and promoted....they then sit back and wait for the markets to react...

Invariably because of the already precarious nature of the companies they have selected , the company's share price collapses.....the hedge fund continues to make and add to their allegations until it thinks the share price has fallen enough....they then buy back the share but at a substantially reduced share price , pocketing the difference between what it sold the share for (that it didn't own , it had just temporarily borrowed) to what it had to pay to buy the share back at (let's say in NMC's case at £10 per share) ...it then disappears off into the sunset having made £20 on each share borrowed, then sold, then bought back again and then finally given back to the pension fund or whoever with its value destroyed...and it's all legal..

I am guessing a little caution before the results so my guess is. £10.10

Adze...if I turn on off my mind of its own auto correct will you stop spouting nonsense

Adze....I can't believe that you don't know the difference between corporate debts of PLC's and the personal debts of individual shareholders, however high their shareholding is..
Ok confess ..your just winding us up aren't you ..

P.C.. It's a bigger picture than just verifying cash , which changes rapidly on a daily basis anyway ...remember that the cash reported was for one day only which was 30th June....sales of $2 billion per annum and costs of around $1.8 billion can between them bring violent swings on a daily basis.. They will wait until they have a whole range of things to brief and update the market on before they publish anything ..

The NMC growth record in turnover and profits this past 5 years have been very impressive...furthermore the trek record of management's early year guidances on the full year figures have always been accurate...not surprisingly though, given that their income streams and fairly predictable... Furthermore their future growth is already baked into the cake, particularly with the recent GOSI agreement which is indeed a landmark...funding as I have said , remains a problem , but the situation is ripe to negotiate a strategic partnership rather than sell the company outright.

Doubting cash is a very easy thing to say , and it is a great way of terrifying investors because as soon as they hear cash mentioned, they immediately think of widescale fraud.

I focus on the bigger picture...as I have said before, share prices are 'always wrong' the share price was wrong at £42 and it was wrong again at £7..

My estimate is that a fair share price right now would be £20 to £25...just using publicly available financial data..

Sparrowe...you are welcome and feel free to repost my original article as often as you wish...that's what these boards are for..

Preserve Capital....I am concerned that debt is too high...I don't though, doubt that the cash and debt figures published in the accounts are "true and fair" of course it is...it's the easiest thing to verify , with the aid of bank statements underpinned by bank reconciliations....a trainee chartered accountant would be able to verify that ...there is no way that E&W would have incorrectly signed off on cash, bank, overdraft and outstanding loan valuations without confirming that.....it simply isn't conceivable...if they did they would never get a licence to conduct an audit again...

Ignore Block's assertions, his terminology is designed to shock and startle investors into selling with words like "king zero" etc etc....I don't know why he wears a suit, he should be wearing a baseball cap back to front the way he talks...I have to give it to him though he sounds credible (in the same way as Donald Trump does)..

Remember , that NMC has 100 or so different sites around the world...they need cash floats and local overdrafts in many different locations just to cover their day to day expenditure.

In any case , even though I think debt is too high...I also think it will be about right...The cause of this is the growing pains of acquiring too many businesses too quickly ...the end result that cash profits aren't sufficient to pay for the capital cost of the businesses they have bought..

Just glancing over their annual accounts you can see that ignoring working capital movements which even themselves out over a long period, in the past 5 years asset purchases (new businesses mainly) have totalled around $3 billion dollars , but cash earned from profits in that time (after the payment of dividends) has only been around $600 million , leaving a funding shortfall of approx $2.5 billion dollars, which has had to be financed by taking on extra loans (in the way that you have to do when you buy more houses to rent out ) plus they have obtained some additional equity funding too..

My view is that the numbers reported for cash and debt are likely to be correct , but debt is still to high so to reduce it they are either going to have to put a moratorium on acquiring new businesses until future profits have paid for their existing businesses , or else issue more equity to pay for future growth.. obviously they won't do this at £8 per share, but should have done it when the share price was around £40 per share..

Agreed Greg peck...the opportunities of a low entry price are now diminishing...the market is finally waking up to the fact that the share price is "wrong" as share prices "always" are...but this time wrong on the down side...as I stated earlier, the share price is seriously undervalued on any metric...it will fly high...maybe not today or tomorrow...but when the share price finally resembles a 'weighing machine' rather than a short term 'voting machine'

Mark....re reported NAV per share....dont worry , I know you are not a de-ramper...I have read many of your posts and know you always write in good faith...the purpose of my earlier post was to breakdown what the NAV per share on the Balance Sheet was, then dismiss it as being irrelevant anyway , which it is..

..the only thing relevant to us all and potential bidders is the validity and integrity of reported earnings, which I have frequently stated in this board, I have no real evidence to doubt...

reading the NMC rebuttal in full of the MW report , I was surprised at how conveniently "opinion laden" and fact free the MW report was....just a series of accusations made on the back of a whole range of misleading assumptions ..

..let me give you an analogy on findings contained in the report....it is the equivalent of concluding that your wife was having an affair by the fact that she was wearing make up to go on a night out with her friends...silly example I know but you get the message..

People are presenting the MW report as an impartial BBC type investigation....see it for what it is....a 'partial' exercise to support the short position taken by MW...(AFTER) them taking that position ), but around the same time as they trailed their intentions to short a FTSEmajor company ...very good at being a self publicist our Carson

Preserve Capital....I agree about the KKI bid helping cushion the blow from the fall out which would have resulted from the share ownership confusion fiasco....it's known as burying bad news in political circles..

Adzzy...I have already drawn attention to the CV of Freeh, since leaving the FBI and concluded that his report will neither be critical or for that matter independent...it will cautiously represent and defend the major shareholders and management, and the actions they have taken..

If that supports the share price though, then that's a good thing and protective of our holdings ...it amazes me how some people report on this work as being the equivalent of an official FBI investigation...

The investigation that will be truly independent will be the one to be conducted by the FCA...but my guess is that this will be a toothless one

LB28...Absolutely right......The cash reported and prospects of NMC as a company is quite separate and distinct from the wealth and liquidity of its major shareholders .....Just as in the wealth and liquidity of any person on this board has sod all to do with the wealth and/or the liquidity of NMC. We all have lots of cash in our bank account at the beginning of the month, but that cash diminishes rapidly as the month progresses , until towards the end where we have more days in the month than cash in our bank...

The only factor to consider is whether the pledges made by the big shareholders, are called in by the funding institutions they made the pledges too.. This will affect the volume and churn of the shares which would in turn affect the share price... The other factor of course is who effectively owns the voting power to support or oppose and bid that did come in..

Surfi....thanks for this link....the DCF model they have used is valid and was the same model in use when I was training to be an accountant back in the 70's. It also backs up and supports my long post last night , which I purposely took a prudent stance on ...

On any metric this is undervalued...there are so many myths and misconceptions on this board which are reported as facts.. ..I will publish a post later exploring some of these myths then busting them, because if people on this board believe them and act on them accordingly , they could end up losing lots of money..

Mark...not sure where you get your $ 1 .25 per share from in 2018 but at the 30th June, 2019 it was as follows...
Net asset value.............$ 1.4 billion. (£ 1.1 billion )
Shares in circulation 208.7 million..
Net asset value per share. $ 6.70 ( £ 5.27 )

The net asset value though includes intangible assets at $ 1.6 billion ( $ 7.67 ) per share for mainly goodwill, so the physical net asset value per share is negative..

Don't despair though, the net asset value would not be the basis for establishing a fair sale price ..I have already explained that in a previous contribution but in essence it would be a multiple of £ 230 million net profits for 2019 (growing at 10 % per annum) , so my view on this basis is that a fair price would be 15 times net annual profit which would equate to £ 3.5 billion as a minimum, ( £16.75 per share ) but likely much higher, subject to the sustainability of 10 % compound annual growth in net profits ...

Having read their interim results rhough, this is very much achievable given their ground breaking agreement with GOSI ( in Saudi Arabia ) secured in the first half of the year , to help provide the future statutory health provision for their citizens , to bring Saudi's health provision up to the standard of other gulf states..

There is no doubt that NMC has encountered the perfect storm this year, with frothy share prices to begin with, combined with the vicious and baseless , profit motivated short attack by MW, as well as the administrative incompetence displayed with share ownership record keeping..

I am just holding tight and waiting for the crowd background noise to die down and for normal share prices to resume ...

Let me finally be controversial by saying that I wouldn't be interested in selling the company at the prices being mentioned , although debt is an issue which needs a strategy to reduce.

I can't imagine that the major shareholders would be favourable to the kind of bid offers being spoken of either, although their current personal finances , or should I say apparent lack of them, may force a "fire sale" because that is what it would be..

However, make your own minds up...

I am hoping to read their full report later, as well as the detailed rebuttal by the NMC..

I am reserving judgement for now, but what I will say at the outset is that MW is hardly the BBC and even though Carson Block sounds credible , I wouldn't put him in the forensic examination category as Andrew Neil who to my knowledge has never used the words "King Zero"

Haha...I think you have realistically interpreted my message .

Has an interesting CV does Mr. Freeh, since leaving the FBI in 2001 he has been working in the private sector defending and representing some very controversial clients ..

I am not expecting the Freeh report to be independent or critical of the management of NMC..I anticipate it will largely defend management and exonerate their positions as much as he is able to within his remit..

That should be good news for us and supportive of the subsequent share price..

The review to be conducted by the FCA, however, will be independent but I am not sure how wide their remit will be...

Watch this space...

Pokerchips...I agree with you totally about what an "approach" means because neither party wants to waste their time on any range of offer not meeting either party's targets...

Calamari..." NMC not projecting £230 million annual earnings for 2019 "

1...Their net earnings for 2019 were projected to be $297-$305 million which equates to £230 million...this is before IFRS adjustment ...after IFRS adjustment it's actually £250 million...I have taken the more prudent figure.
That was the position projected as at the half year results anouncement on 22 August 2019

2..Capital Markets day update on 21st October, 2019, confirmed the guidance given in August

3.. Management confirmed these estimates again in its response to the share price movement on 18 December 2019

4..Management reconfirmed these estimates again on 4 February in their last statement regarding their response to share price movement..

Have I missed something Calamari or do you have access to information which isn't in the public domain..

Incidentally , the projections for 2020 anounced at the capital markets day on 21st October, 2019 showed a 10% increase on 2019...to me that is a company which is growing, and the final bid offer price should reflect this subject to my previous caveats..