ASX:MPL

Since posting a high of $3.30 on August 20th, shares of MPL have dropped over 12% and posted a low of $2.87 in early trade today.

Internal momentum indicators are now reflecting and oversold condition on the daily charts.

We recommend accumulating MPL in the 2.75 – $2.90 range.

MediBank Private

Our Algo Engine generated a buy signal in MPL on Friday.

With the share price retracing from a $3.39 high, (formed in February), to close at $2.89, we now draw your attention to MPL as it enters our value range.

MPL’s earnings report last month showed the company is struggling to grow revenue and bottom line profit, therefore 2019 will likely show flat to no growth.

However, with the stock on a 4.4% yield and adding a covered call option, 10 – 12% annualized cash flow can be generated without too much downside risk.

Look to accumulate within the $2.80 – $2.90 range.

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.

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

We suggest accumulating Medibank near the $2.85 support level.

Medibank is a current holding in the ASX 50 model portfolio from may 30th at $2.73.

Following the correction from the January high of $3.30, the stock now trades on a forward yield of 4.5%.

We expect a  rally from the current $2.85 level back towards $3.00. We will then add a covered call option, which will help further enhance the annualised cash flow.

Medibank Private

Following the recent Algo Engine buy signal, we recommend investors add Medibank to their portfolio at $2.90.

On a move back towards $3.00,  look to sell the $3.10 Dec calls to enhance the income return.

Medibank goes ex div 6.75 cents on the 6th of September.

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Our Algo Engine recently generated a buy signal in Medibank at $2.80.

With the stock now making a further “higher low” formation at $3.00, we recommend buying MPL and selling December call options to enhance the yield.

December $3.20 call options are generating an additional $0.08 in premium.

Medibank goes ex-div $0.0675 on the 6th September

Medibank Private

We’ve been recent buyers of Medibank following the Algo Engine buy signal at $2.80.

With the stock now trading over $3.00 we recommend investors look to add a covered call option into December at the $3.10 strike price.

The addition of the option premium combined with the September dividend is generating an annualized cash-flow of almost 12%. The strategy also allows for 10% capital growth, should the call option get exercised at expiry.

Medibank goes ex-div $0.30 on the 21st of September.

Since trading as high as $3.25 a month ago, the share price of MPL has dropped over 13% to hit an 8-month low of $2.79 this week.

There have been several market reports citing increased political pressure for lower premiums and lower profits for domestic health care providers.

MPL reported a first-half net profit of $245.6 million in February, up 5.9% from the previous corresponding period with an interim fully-franked dividend of 5.5 cents per share, 4.8% higher than the previous corresponding period.

Our ALGO engine triggered a buy signal on MPL at $2.81 on April 13th.

We suggest buying MPL at current levels as a “buy/write” strategy.  More specifically, looking to sell $3.00 Call options into December for 10 to 12 cents.

This will allow for some capital appreciation and investors will collect the 6.75 cent dividend on September 6th.

Medi-Bank Private

Our Algo Engine triggered a recent buy signal in Medibank Private and we’re looking for price action to find support near the current $2.80 level.

Note: Technical price gap down to $2.67, lower bound of the support range.

Our Algo Engine triggered a buy signal in MPL  going into yesterday’s close. We expect buying interest to remain supportive of near-term price action.

MPL goes ex-div 6.5 cents on the 6th September.

Medibank Private