The last 12 months have been bumpy for the FTSE 100, with the index falling around 2.5% over that period, to today’s price of 7,149. However, it has been a glorious year for the following two stocks, which have raced away from the rest of the index. Should you buy them now?
All hail healthcare and equipment services specialist NMC Health (LSE: NMC), which is the top performing FTSE 100 stock of the 2017/18 financial year. Its share price grew 92% making it the tax year’s biggest riser, according to Interactive Investor.
The company is listed in London but headquartered in Abu Dhabi, and its recent growth surge is no flash in the pan. It is up 423% over three years, and a whopping 980% over five years. Truly a growth monster. This is now a £7.1bn company, one that has repeatedly delivered 25% earnings growth every year. My fellow Fool Peter Stephens is well aware of its potential, recently suggesting that its high and consistent growth rate should continue over the longer term.
Last month, the private healthcare operator reported profits jumping by a third as it treated more patients, and generated more revenue from each of them. Its net profit for the year to 31 December rose 38% to $209.2m, with revenues up 31% to $1.6bn.
Four years of impressive double-digit earnings per share (EPS) growth look set to continue with City analysts pencilling in 44% in 2018, and another 23% in 2019. That should trim its toppy valuation, currently 45 times earnings, to a more reasonable 25.5 times. With a current yield of just 0.7%, this is primarily a growth play, one whose momentum could have further to run. It isn’t cheap, but there is a good reason for that. The other 99 stocks on the FTSE 100 wish they were NMC Health right now.
The mighty Evraz
Coming a distant second but still with impressive growth is FTSE 100-listed miner Evraz (LSE: EVR), up a steely 79% over the 2017/18 financial year. This £6.42bn FTSE 100 growth hero is a vertically integrated steel, mining and vanadium business with operations in the Russian Federation, US, Canada, Czech Republic, Italy and Kazakhstan. Last year, its crude steel production topped 14m tonnes. Its share price growth was just as weighty.
Last year was a good ‘un as Evraz doubled its full-year free cash flow from $659m to $1.32bn and shrank its net debt from $4.8bn to $4bn. It made a net profit of $759m, reversing its net loss of $188m in 2016.
Cycle of life
Foolish contributor Alan Oscroft is a fan, recently hailing Evraz as a top dividend stock that he would buy and hold forever. However, he rightly warned of the cyclical nature of commodities markets. Right now, Evraz is benefiting from that cycle, but there is the danger that you might be investing at the top, rather than the bottom.
Having said that, it is not exactly expensive, currently trading at 5.9 times earnings. The forecast yield has risen to a stonking 10.1%, with cover of 1.6. EPS are forecast to grow a whopping 101% this year, although forecasters see a potential 19% EPS drop in 2019. There are risks, but just look at the potential rewards.
Harvey Jones 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.