With Medibank looking indicative opening price around $2.30 atm, this has to be great value atm sitting at under 19 PE ratio. Huge discount to Medibank, and I like its growth potential better anyway. Must have been some holders wanting to exit to get onto the medibank hype today.
Comments from Shawn Hickman, Market Matters:
"The government has had a bonanza with Medibank (MPL), issuing the stock to retail at $2 a share and institutions at $2.15 a share, at the 100% top end to the retail investor – thanks for nothing! I believe Medibank will trade at a premium to NIB Holdings Ltd (NHF) e.g. at Friday’s closing price a 15% premium is $2.15, I can see NHF trading up to $3.60 (chart 1) into Christmas potentially taking MPL up towards $2.42. Also for good measure (sarcastic I am afraid), the government has clawed back broker allocations by 20%, so if you thought you had $50k it’s now $40k – I personally think the whole float has been a farce! In conclusion, I am a seller of Medibank at $2.40, a 20% premium to issue for investors and traders. Personally, I was unable to purchase any MPL as ethically, clients whose money I manage must come first hence the scale back counts me out, but I will be a seller for clients over $2.30."
NHF Price at posting:
$3.05 Sentiment: Buy Disclosure: Held
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