Medibank Private Ltd (ASX: MPL) has continued its gradual decline today with its shares falling 1.1% to $2.355.
Although retail investors who bought into the November IPO are still sitting pretty on a 17.75% paper profit, they'll still be feeling the pain of the stock's 9% retreat since just prior to the release of its half-year earnings report late last month.
The truth is, while Medibank's results were solid, they weren't as good as what one would expect from a company that was trading on a trailing price-earnings multiple of 27 times. Investors had been hoping for a full-year earnings upgrade, while cost and efficiency improvements probably weren't quite as drastic as what they had been expecting, either.
While Medibank's shares have significantly outperformed the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) since its market debut on 25 November last year (based on the $2 price paid by retail investors), that is a trend I don't see continuing over the long-run from its current price tag. As such, I would suggest Medibank shares are a 'hold' at best, and I certainly wouldn't suggest buying now.
