Shortlisted – Medibank, Woolworths and ANZ

Editorial director of Switzer
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The Medibank bonanza goes live tomorrow. Institutions have bid up the price to $2.15 but retail investors only had to pay $2.

Switzer Super Expert Paul Rickard still feels that it is an expensive stock.

“If it lists around $2.20 – that puts it on a multiple of 23.5 – at $2.25, it is on a multiple of 24.0. I am planning to sell my small holdings – there is better value elsewhere,” he says.

If you applied for shares, you will receive conformation of your individual allocation tomorrow 25 November, 2014. But here is a guide that Medibank has issued.

* The final allocation of shares will be subject to rounding and application of the final price to any allocation above $250,000.

Paul is a lot more upbeat on Woolworths than Medibank. At below $32 he says it is looking attractive.

“The market got scared by the disappointing September quarter sales result, the potential for increasing competition by Costco and others, and the break even date for the Masters hardware businesses being pushed out even further,” he says.

“I wouldn’t write Woolworths off – at $31.60, it is trading at a multiple of 15.6.

And although he is a bit negative on growth in general, Charlie has got a positive outlook on ANZ after the Chinese rate cut.

“ANZ has the greatest exposure to SE Asia and the greatest percentage of US dollar earnings,” he said this morning.

“ANZ has experienced P/E compression due to regulatory capital concerns (Murray Report) and its exposure to Asia. The share price is the same as it was 12 months ago, yet earnings and dividends are up. That rising EPS and DPS trend will continue in our forecasts.”

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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