We see Medibank staying within a $2.90 – $3.20 consolidation range. There was nothing in last week’s earnings result to suggest otherwise.
With the stock on 4.1% yield, little to no revenue growth and flat underlying earnings at best, we see MPL as a “tight buy-write” strategy.
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The only opportunity here is to strip out the dividend, franking credits and option income to generate 10 – 12% cash flow from a relatively low risk stock.
Value emerges near support at $2.70.
Medibank Private
