Medibank Shares (MPL ASX) has had a good run since the IPO. It was primarily targeted and sold to mom and dad investors as a safe blue chip company.
We consider Australia private health insurance sector an oligopolistic structure where few players dominate the industry. The other major listed health insurance provider is NIB (ASX NHF).
MPL Share Price
We can invest across the globe in search of great companies at decent prices. Quality Australian companies in the All Ordinary index usually trades at a premium because majority of superannuation funds is mandated to run Australian equities only.
Only because a company is well run and attractively positioned in the industry does not necessarily mean it would be a good investment. Medibank shares has been bid up by the market simply because there is a darth of defensive stocks listed on the ASX.
Recent ACCC investigation could be a hiccup but it will take time before the financial impact can be solidified.
MPL vs NHF
Chart above shows the year to date return of MPL and NHF.
We will be keeping an eye on MPL ASX.