2 FTSE 100 stocks I’d buy in November

G A Chester discusses why he’d buy these two FTSE 100 (INDEXFTSE:UKX) stocks.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Ageing populations in the developed world and rising incomes in developing economies should provide strong tailwinds for healthcare companies in the decades to come. Here’s why I’d buy two FTSE 100 healthcare stocks at their current prices.

Growth star

NMC Health (LSE: NMC) was founded as a small pharmacy and clinic in Abu Dhabi in 1974. It’s grown to become the leading integrated private healthcare network operator in the GCC region (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates). It’s also one of the leading global providers of fertility treatments through its European, South American and Middle Eastern subsidiaries.

The company was listed on the London Stock Exchange in 2012 and its growth has been such that it was promoted to the FTSE 100 in September. I believe the company has a bright future and is set to become a stalwart of the top index, due to expectations of continued strong growth.

For the current year, City analysts are forecasting earnings per share (EPS) of 97 cents (74p at current exchange rates), 24% ahead of last year. The shares are trading at a new all-time high of over 3,000p, giving a P/E of over 40. On the face of it this appears expensive, but if we look forward to 2018, a consensus EPS forecast of 135 cents (103p) brings the P/E down to under 30. Furthermore, the 39% EPS growth gives a price-to-earnings growth (PEG) ratio of 0.75, which is on the ‘good value’ side of the PEG ‘fair value’ marker of one.

With NMC also having strong growth prospects beyond next year, I believe the stock could be a highly rewarding long-term investment.


ConvaTec (LSE: CTEC) is a global medical products and technologies company focused on therapies for the management of chronic conditions, with market-leading positions in advanced wound care, ostomy care, continence and critical care, and infusion devices. It has 8,500 employees and does business in more than 100 countries.

The company joined the stock market as recently as October last year. It raised £1.5bn at 225p a share and was valued at £4.4bn, making it London’s biggest flotation of 2016. The shares were pushing towards 350p this year, as management reported progress on its strategy to deliver both good top-line growth and significant margin improvement.

However, the market was rocked by a shock update three weeks ago in which the company said Q3 performance had been severely impacted by supply issues, principally relating to the movement of manufacturing lines from the US to the Dominican Republic. As a result, management said organic revenue growth will be between 1% and 2% this year, compared with previous guidance of 4%. Furthermore, it expects most of the margin gains of 2016 and H1 2017 to be temporarily wiped out and said it will give guidance on growth and margins for 2018 early in the year.

While ConvaTec’s operational issues are hugely disappointing, the company has indicated it anticipates resolving them — some by the end of the year and some during H1 2018. Given the growth and margin progress that was being made up to this point and the fact the shares have slumped so far (near to 180p), I see merit in buying a small stake in this higher risk/reward turnaround situation, perhaps adding on an improving outlook.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

G A Chester has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

More on Investing Articles

Investing Articles

Here’s how I’d aim for a ton of passive income from £20k in an ISA

To get the best passive income from an ISA, I think we need to balance risk with the potential rewards.…

Read more »

Abstract bull climbing indicators on stock chart
Investing Articles

2 FTSE 100 stocks I’d buy as the blue-chip index hits record highs

This Fool takes a look at a pair of quality FTSE 100 stocks that appear well-positioned for future gains, despite…

Read more »

Satellite on planet background
Small-Cap Shares

Here’s why AIM stock Filtronic is up 44% today

The share price of AIM stock Filtronic has surged on the back of some big news in relation to its…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

At a record high, there can still be bargain FTSE 100 shares to buy!

The FTSE 100 closed at a new all-time high this week. Our writer explains why there might still be bargain…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

After profits plunge 28%, should investors consider buying Lloyds shares?

Lloyds has seen its shares wobble following the release of its latest results. But is this a chance for investors…

Read more »

Abstract bull climbing indicators on stock chart
Investing Articles

Something’s changed in a good way for Reckitt in Q1, and the share price may be about to take off

With the Reckitt share price near 4,475p, is this a no-brainer stock? This long-time Fool takes a closer look at…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

This new boost in assets might just get the abrdn share price moving again

The abrdn share price has lost half its value in the past five years. But with investor confidence returning, are…

Read more »

Young Black man sat in front of laptop while wearing headphones
Investing Articles

As revenues rise 8%, is the Croda International share price set to bounce back?

The latest update from Croda International indicates that sales are starting to recover from the end of 2023, so is…

Read more »