RE: IGNORE THE SHORTER INFESTATION ON THIS BOARD10 Feb 2020 01:28
Exhausting to ‘outperform’ the shorter troops
Repost sparrow:
‘ Reposted from user 'alwayswrong' incase anyone doesn't care to scroll down that far, for all the honest PIs who want to know the FACTS
The usual method for determining the offer price is based on a multiple of net earnings..
NMC are projecting annual earnings of £230 million for 2019..
1. If the NMC is categorised as being a company in decline ( a dog ) in other words their hospital contracts are be being wound down over say a 10 year period then an earnings multiple of between 6 and 8 times would be a fair offer...i.e. between £1.4 to £1.8 BN
£7.00 to £8.70 per share..
2..If the NMC were to maintain their existing hospitals in perpetuity, but not acquire any new hospitals ( cash cow ) then an earnings multiple of between 10 and 12 would represent a fair offer..
I.e. between £2.3 to £2.8 BN.. or £11.00 to £13.50
3..If , however , the NMC was still deemed to be a growth company ..I e. acquiring new hospital contracts ( rising star )then a minimum earnings multiple would be around 15 with a maximum of up to 35, depending on the planned levels of growth ..
This would make a fair sale price to be in the region of
£3.5 to £8 BN. or ....£17 to maybe up to £40 per share.
It follows therefore that all other things remaining equal , then unless the NMC is in decline and winding down,. the offer price of £2 billion being mentioned is a derisory one.
My understanding is that the NMC is still a growth company ...?? For information the share price earnings multiple ( PE ratio ) over the past 5 years has ranged been between 14 and 36...
I said all other things remaining equal because we have the overhang of the Muddy Waters report.. ‘