Shareholders in Australia and New Zealand Banking Group (ASX: ANZ), Woolworths Limited (ASX: WOW) and Rio Tinto Limited (ASX: RIO) have had a year they'd rather forget.
Since the beginning of 2014 – 10 months ago – none of their share prices have been able to breakeven.
Rio, the worst performing of the three blue-chips is down 13%, ANZ has fallen 1.24%, while Woolworths is marginally lower.
So could this be your opportunity to buy in cheaply?
Rio Tinto
Rio's falls are likely a result of the significant drop in the spot price of its most lucrative commodity – iron ore – which is down around 40% since the beginning of the year. The selloff in the miner's stock is probably justified, given it relies on the steelmaking ingredient for 90% of its earnings. Indeed, earnings per share are expected to fall in the coming year. Longer term, value could be found in Rio shares; as management continue to hint at higher dividends, increased debt repayments and further cost cutting. However, given the outlook for iron ore, it's certainly not one for risk-averse investors.
ANZ Banking Group
Following a 5% selloff in September, ANZ shares have been pushed into negative territory, countering gains made in a strong rally at the beginning of the year. Of the big banks, I believe ANZ – our only bank with meaningful exposure to Asian markets – represents the best growth prospect moving forward. However all four of Australia's biggest banks don't come cheap. I've got ANZ firmly on the watchlist but at today's prices I can't justify a purchase of its stock.
Woolworths
In recent years, supermarket giant Woolies has proven to be one of the best defensive investments on the ASX. In addition to rising dividend payments, its share price is up nearly 150% in the past decade. However, I think the market is expecting it to continue into perpetuity. At current prices, I think the stock is far too expensive for investors with hopes of beating the market. Indeed, its average annual total annual shareholder for the past five years, is just 7.8%, according to Morningstar.
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Each of these businesses offer brand recognition, competitive advantages and juicy fully franked dividends. Unfortunately, none of them are priced to buy today.
