The Motley Fool

After rising 100% in a year, I see more upside ahead for these 2 uncovered growth shares

Healthcare is one of the most defensive and lucrative industries in the world. The sector is also set for rapid growth over the next few decades as the world’s population ages and incomes grow, especially in emerging markets, giving more customers access to the services offered by the healthcare industry.

Georgia Healthcare (LSE: GHG) and NMC Health (LSE: NMC) are two fantastic plays on this trend. Both companies operate healthcare facilities in rapidly growing emerging economies. NMC Health is a private health services provider in the United Arab Emirates while Georgia Healthcare provides services such as medical facilities and health insurance in the Georgian market.

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...

Explosive growth

Over the past few years, demand for these companies’ services has surged and so have profits. Even though Georgia Healthcare has only been an independent public company for a little more than a year, this year the City expects the company to report a pre-tax profit of £25m, up 400% from 2014’s reported figure of £5m. Over the same period sales have grown from £67m to £253m and earnings per share have exploded by 463% from 2.7p to 15.2p.

It looks as if this growth is set to continue. Today Georgia Healthcare released its first quarter results with an increase of profitability of 8.4% year-on-year to £4.3m. Group revenue exploded 157% year-on-year thanks to growth at the firm’s pharmaceutical business after the consolidation of Pharmadepot. While the shares haven’t moved much on this news, today’s results show that it is on track to hit City forecasts for growth this year. Analysts have pencilled-in earnings per share growth of 27% for 2017 and 41% for 2018.

Even though shares in the company are currently trading at a relatively expensive forward P/E of 23, this valuation seems appropriate considering the group’s projected growth. If earnings hit City targets the next two years, shares in Georgia Healthcare are trading at a 2018 P/E of 15.9 and PEG ratio of 0.4.

Middle East exposure

NMC has reported similar growth. This year City analysts expect the company to report revenues of £1.24bn, up from around £330m for 2012. Pre-tax profit is expected to hit £181m, up from £60m five years ago. Earnings per share have risen 240% over this period.

Considering this explosive earnings growth, it’s no surprise shares in Georgia Healthcare, and NMC have risen by 87% and 105% respectively over the past 12 months.

Undervalued growth

Just like Georgia, shares in NMC also look cheap compared to the company’s projected growth rate. City analysts believe the firm can grow earnings per share at 28% per annum for the next two years. The shares are currently trading at a forward P/E of 25.6 and a 2018 P/E of 19.9.

So overall, with City analysts expecting high double-digit earnings growth for these two healthcare providers, it looks as if the shares still have plenty of upside ahead of them and now could be the time for investors to buy in before it’s too late. 

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...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Rupert Hargreaves has no position in any 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

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.