Shares of Medibank Private Ltd (ASX: MPL) have fallen 3.7% today to just $2.33, heavily underperforming the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) which has dropped roughly 0.4%.
While the health insurer had been one of the hottest stocks to own in the months following its initial public offer (IPO), that appears to have changed since the release of its first set of interim results as a public company. From a high of $2.59, the stock has retreated slightly over 10%.
The results weren't bad per se, but they weren't what you would expect from a stock trading at 27x trailing earnings, either. Its Management Expense Ratio (MER) improved considerably, although that was mainly due to spending on projects being skewed more towards the current half year, while the insurer also reaffirmed its full-year earnings guidance.
Medibank Private is a high-quality company but as is so often the case, a great company doesn't necessarily make for a great investment. At its current price-tag, Medibank could be considered 'priced for perfection' with little margin of safety for those who buy today.
