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.
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.