Summary
The fund managers believe that Medibank Private Ltd is currently positioned as a strong investment opportunity despite ongoing regulatory challenges. They highlight that Medibank has shown consistent earnings upgrades driven by solid fundamentals, with a high-quality management team effectively managing claims and improving patient outcomes. In their opinion, the company plays a vital role in Australia’s healthcare system, having returned $1.46 billion in givebacks to customers due to COVID-19 and maintaining a strong capital position with zero debt. The fund managers note that Medibank's market share of 27% allows it to negotiate favorable terms with hospitals, helping to keep claims inflation in check. They also express confidence that the company is well-positioned for continued growth, as evidenced by a 19% increase in stock value over the past year and a robust dividend yield of 4.6%. However, they acknowledge the regulatory risks posed by pressures on private hospitals, which could impact the sector's dynamics moving forward.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Source: Trading View
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Commentary From The Managers
Airlie Funds Management
1 Aug 2025
$5.04
Summary
- Airlie Funds Management notes a strong performance from Medibank Private, with a 30% increase over the past year, including dividends.
- The fund has trimmed its position in Medibank, reflecting its significant size in the portfolio.
- Despite the trim, the investment setup remains attractive, with good potential for growth.
- There is decent policyholder growth and manageable claims expected to continue.
- Regulatory risks are present, particularly with hospital operators facing challenges and seeking government intervention.
- Overall, Medibank is well-positioned for ongoing growth, bolstered by strong market share and effective management during COVID.
- Airlie Funds Management anticipates that the company will continue to deliver positive results moving forward.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Commentary From The Managers
Airlie Funds Management
1 Aug 2025
$5.04
Summary
- Airlie Funds Management notes a strong performance from Medibank Private, with a 30% increase over the past year, including dividends.
- The fund has trimmed its position in Medibank, reflecting its significant size in the portfolio.
- Despite the trim, the investment setup remains attractive, with good potential for growth.
- There is decent policyholder growth and manageable claims expected to continue.
- Regulatory risks are present, particularly with hospital operators facing challenges and seeking government intervention.
- Overall, Medibank is well-positioned for ongoing growth, bolstered by strong market share and effective management during COVID.
- Airlie Funds Management anticipates that the company will continue to deliver positive results moving forward.
Alphinity Investment Management
17 June 2025
$4.90
Summary
- Alphinity Investment Management considers Medibank (ASX: MPL) as one of their top portfolio positions.
- Medibank has shown consistent earnings upgrades over the last three years.
- The company benefits from a high quality management team skilled in managing claims.
- Medibank has been proactive in changing clinical practices to improve patient outcomes and reduce claims costs.
- The combination of these factors has led to consistent earnings outperformance.
- Alphinity's confidence is based on real underlying fundamentals driving these upgrades.
- This trend is not viewed as a short-term blip, but rather a sustained pattern.
- As long as earnings revisions persist, Medibank is seen as a core contributor to portfolio alpha.
Airlie Funds Management
31 Mar 2025
$4.44
Summary
- Airlie Funds Management continues to hold Medibank Private due to a solid 1H25 result.
- The company announced a premium rate rise of 3.99%, exceeding market expectations.
- This increase has helped reduce some of the "regulatory risk" discount previously affecting the stock.
- The positive performance reflects confidence in Medibank's operational stability.
Ten Cap
28 Feb 2025
$4.35
Summary
- Ten Cap notes a positive performance from Medibank, highlighted by a beat in results.
- Coinciding with this was a surprisingly positive government rate announcement.
- However, there is a noted dislocation in rate and rhetoric.
- The government has urged insurers to pay more to private hospitals.
- Ten Cap continues to view the sector as fundamentally challenged.
- This challenge is attributed to ongoing structural headwinds.
Airlie Funds Management
30 Sept 2024
$3.65
Summary
- Airlie Funds Management views Medibank as pivotal in Australia’s health transition, serving over 4.2m customers and alleviating pressure on the public healthcare system.
- Medibank paid out $6.3bn in health insurance claims in the last financial year, underscoring its role in funding medical care.
- Regulatory tensions exist as the private health insurance sector faces criticism for profitability amid rising healthcare costs.
- Private hospitals are struggling due to labor shortages and inflation, leading to calls for government bailouts, which may not resolve underlying structural issues.
- Medibank is investing in new models of care, shifting focus from expensive hospital stays to virtual care and home care, aiming to lower overall healthcare costs.
- The transition is essential to prevent increased government spending on healthcare, estimated to rise significantly over the next forty years.
- Federal Health Minister acknowledges that the government cannot sustain unprofitable hospital models and that some closures may be necessary.
- Medibank has returned $1.46bn to customers during the pandemic, maintaining a gross profit margin below pre-pandemic levels, indicating a commitment to not profiting from the crisis.
- Despite regulatory uncertainties, Airlie Funds Management sees an investment opportunity in Medibank, which has grown earnings per share at 8% p.a. over the past decade.
- Medibank exhibits financial strength with a capital ratio of 14.1% and zero debt, positioning it well for future challenges.
- As Australia’s largest health insurer, Medibank holds a 27% market share, allowing it to negotiate better terms with hospitals.
- Management quality is strong under CEO David Koczkar, who has driven policyholder growth and cost management since 2014.
- Valuation metrics are attractive, with Medibank trading below its long-term P/E average and offering a dividend yield of 4.6%.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who has invested in Medibank Private Ltd (ASX:MPL)?
Fund managers including Ten Cap, Alphinity Investment Management and Airlie Funds Management have invested in Medibank Private Ltd (ASX:MPL).
Why have investment managers invested in Medibank Private Ltd (ASX:MPL)?
Fund managers have invested in Medibank Private Ltd due to several key factors that indicate strong growth potential and resilience in the healthcare sector. Firstly, Medibank has demonstrated consistent earnings growth, benefiting from a high-quality management team adept at managing claims and improving patient outcomes. This has resulted in a solid earnings upgrade trajectory over the past three years, making it a core holding for funds like Alphinity.
Additionally, Medibank plays a crucial role in Australia’s healthcare system, serving over 4.2 million customers and significantly supporting the public healthcare system by paying out substantial claims. Despite regulatory pressures and challenges within the private hospital sector, Medibank is proactively transitioning to more cost-effective care models, which positions it well for future sustainability.
Financially, Medibank boasts a robust capital position with zero debt and a strong market share, allowing it to negotiate favorable terms with hospitals. This financial strength, combined with an attractive valuation and dividend yield, further enhances its appeal to fund managers. Overall, the combination of solid fundamentals, strategic management, and a pivotal role in the healthcare landscape makes Medibank an attractive investment opportunity.
What happened to Medibank Private Ltd (ASX:MPL)?
In recent comments regarding Medibank Private Ltd (ASX: MPL), fund managers have expressed strong confidence in the stock's performance. Alphinity Investment Management highlighted Medibank as a top portfolio position, emphasizing its consistent earnings upgrades driven by a high-quality management team adept at managing claims and improving patient outcomes. With a share price around $4.90, they noted that these upgrades reflect solid underlying fundamentals, making Medibank a core contributor to portfolio alpha. Similarly, Airlie Funds Management acknowledged a 30% increase in the stock over the past year, despite trimming their position slightly. They praised Medibank's attractive setup, manageable claims, and strong market share, while also noting potential regulatory risks in the healthcare sector. Overall, both firms see Medibank as well-positioned for continued growth.