2 FTSE 100 stocks I'd buy in November

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.

Turnaround

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.

5 top blue-chips

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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.

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