Next week's float of Medibank Private (ASX: MPL) is set to be a blockbuster.
No doubt many investors who missed their chance to buy in are kicking themselves.
But don't be…
Even at $2.00 per share Medibank wasn't/isn't a bargain and even if it jumps to over $2.30 immediately, long-term investors have no reason to worry.
IPO = It's Probably Overpriced
In fact, most IPOs which come late in a bull market go on to underperform the market for some time.
In addition, there's a plethora of better buying opportunities available on the market right now.
For example, Computershare Limited (ASX: CPU) is a standout beneficiary of rising U.S. interest rates and a falling Australian dollar. Computershare provides the necessary infrastructure to connect shareholders and their companies. Its services include paying company dividends and helping shareholders vote.
Then there's Super Retail Group Ltd (ASX: SUL), the owner of brands like Ray's Outdoors, Rebel, Supercheap Auto and more. It's currently offering a dividend of 5.1% fully franked and shares trade on a price-earnings (P/E) multiple of 14.
On the other hand, Medibank is tipped to pay a dividend equivalent to 3.5% and is expected to float on a P/E ratio of 21.
Heck, even the expensive Woolworths Limited (ASX: WOW) looks cheaper than Medibank. It's trading on a dividend yield of 4.3% and P/E of 16.6.
Our #1 stock idea for 2015 – Yours FREE!
If you missed your opportunity to apply for shares in the Medibank IPO, don't sweat it. After all, there's plenty of great stocks trading on better valuations anyway (see below)…
