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Commonwealth Bank of Australia, BHP Billiton Limited & Telstra Corporation Ltd: Should you buy?

It’s been a bumpy ride for the Australian sharemarket in recent weeks with the benchmark S&P/ASX 200 (INDEXASX: XJO) currently sitting 4% below its recent multi-year highs. Unfortunately, it’s been pretty difficult to avoid the pain with some of Australia’s largest and most widely-held stocks leading the downwards charge.

Commonwealth Bank of Australia (ASX: CBA) is one such company worth noting. The bank has been one of the market’s favourite stocks in recent history, thanks in large part to its climbing profits, its defensive nature and its ripper dividend yield. However, investors seem to have cooled on the stock lately with shares now trading at just $78.17, down from their recent all-time high near $84.

Although it recently reported a record $8.7 billion profit, it seems that investors were quite underwhelmed with its prospects moving forward. It appears that investors could be losing the will to pay such a high price for its shares considering its slim growth prospects in the near future, as well as the headwinds facing the business. While some investors would see this as an opportunity to stock up, I would starkly disagree and will not be buying its shares until I am presented with a much cheaper price.

Telstra Corporation Ltd (ASX: TLS) is another company that seems to have lost the market’s favour recently with the stock down more than 5% in the last two weeks. With an incredible (and growing) customer base and a market capitalisation just shy of $68 billion, Telstra is one of Australia’s most dominant companies. Also with the rapid growth of cloud computing and the ‘internet of things’, its services will continue to grow in demand over the coming years, if not decades.

However, investors need to be prepared to pay quite a high price for the right to a share in that future. At $5.44, you might be better off waiting for a more attractive point of entry, or else consider investing in one of the nation’s up-and-coming telco’s such as M2 Group Ltd (ASX: MTU), which owns brands like Dodo and Commander.

The most talked about blue-chip

Of all of Australia’s blue-chips, BHP Billiton Limited (ASX: BHP) has received perhaps the most attention in recent weeks. In particular, its failure to implement a highly anticipated share buyback program as well as the plummeting iron ore price has seen its shares crumble more than 9% since late last month.

Although I like BHP’s prospects moving forward, I can’t help but think it may be a little early to be making a move on the stock. I expect that the iron ore price will continue to fall which should see BHP’s shares decline to an even more attractive price. Until then, I’ll be happy to sit on the sidelines and explore other fantastic opportunities the market is presenting me with right now.

As a perfect example, The Motley Fool has issued a firm "BUY" rating on this small but ultra promising ASX company... and you can get the name and code FREE right now. Click here for your free copy of "The Motley Fool's Top Stock for 2014."

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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