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Here’s why Medibank Private Ltd’s share price surged 11% today

It’s been a good day for Australian share investors, but few companies have generated as much excitement as Medibank Private Ltd (ASX: MPL).

The health insurer’s shares rose as much as 20.5% earlier in the session, touching an all-time high of $2.70. They’ve since retreated but are still sitting nearly 11% higher at $2.485.

Source: Google Finance

Source: Google Finance

Shares of Medibank Private’s rival NIB Holdings Limited (ASX: NHF) have also gained 4% for the day.

The surge in Medibank’s share price came after the group increased its full-year earnings guidance by 27% this morning, despite lower-than-expected new sales during the first-half.

Investors who bought shares during the November 2014 float are now sitting on a paper profit of more than 24%, compared to an 8.5% decline for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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