Medibank – Algo Buy Signal

Medibank Private is under Algo Engine buy conditions and is a current holding in our ASX 100 model.

At 19x forward earnings and 2 – 4% earnings growth, Medibank is a strong candidate for a covered call overlay to enhance the investment returns.

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The stock trades on a forward yield of 3% and when adding a covered call, we can boost the cash flow to 10% on an annualized basis.

Buy MPL at $3.25 and look for a move higher to $3.50 before selling call options.

For more information on this strategy, please call our office on 1300 614 002.

 

 

Author: Leon Hinde

Leon has been working in the financial services industry for 18 years in management and advisory roles. Leon has extensive experience in general advice and dealings involving securities and derivative financial products.

PS 146 Securities & Derivatives, ADA 1 & 2 accreditation, Responsible Manager Certificate. Leon is authorised to provide financial product advice and deal with respect to the following financial products:

· Deposit Products
· Securities
· Derivatives
· Interest in managed investment schemes; and
· Government debentures, bonds and stocks