Investor demand should be high for the Medibank Private IPO

Investor demand should be high for the Medibank Private IPO. Local funds managers are likely left scrambling for shares after listing and given the company's size of $4.5bn-plus, inclusion in the ASX100 is but a matter of patience. Buying support should be virtually guaranteed in the first months post listing. Probably a fair assumption too the upper limit of the indicative price range will be close to the allocated price, at which Medibank shares will be trading on a Price-Earnings multiple of circa 21 and a forward (not manipulated) dividend yield of 3.5%. Fully franked. In share market terms, Medibank Private is going to fit in between Ramsay Healthcare (PE 26) and nib Holdings (PE 20). But is such an elevated multiple justified? Should investors try to get on board? A number of factors about Medibank and the float receive a Do Not Like label. My Weekly Insights: (VIEW LINK)

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