Medibank Private Limited (ASX:MPL) is Australia’s largest health insurer.
The fundamental reasons for buying:
1. It enjoys a demographic tailwind
2. It is the market leader in a concentrated industry
3. It has an opportunity to reduce its claims payout ratio (ie increase profits)
The technical reasons for buying:
The $2.00 area seemed a logical place for some price support given the IPO to retail was $2.00 and institutional investors at $2.15.
Plus, it has formed a pretty good set up on the chart:
1. Breaking the downtrend
2. Retest the break
3. Bounce this week
Above about $2.14 should see Medibank start jogging.
Maybe Medibank is trying to get fitter and healthier for summer!!!
Jogging off the start line
I made a start this week on what is likely to be a multi-year process of accumulating some Medibank shares once out of a downtrend and selling a few once it falls out of an uptrend. Multi-year rinse and repeat with the aim to build a long term dividend stream with little capital cost in the long run.
22 August 2015 Update
Medibank delivered its annual report yesterday which showed some great financial metrics and the share price reacted accordingly. In my opinion, there is nothing better than technical analysis on fundamentally sound stocks.
Investing is a marathon not a sprint however it helps to be off to a good start.
The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.