top 5 reasons medibank will be a short gain but in the end a long term dud:
1. Stock is overvalued. taking into account high P/e,s and low yields, low growth rate - 25-30% overvalued compared to TLS,WBC,NAB,IAG,SUN etc. Stock is a mature, low growth business.
2. MER cuts have not impacted bottom line NPAT which is all that one should look at. NPAT flatish trend for 3 years straight.
3. Future potential contract losses like the immigration one - hurting profit- defence up for renewal in 2016.
4. Not defensive at all - 30-40% of business is investment income, and this is a potentially volatile area.
5. ageing population can increase claims, its not a tailwind, its a headwind.
6. future disruption and competition from new technologies.
7. Dependent on government regulation. future Government regulation changes can significantly alter their business.
please address each of the above points 'iamgenius' rather than call me 'clueless'
