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Smashed: National Australia Bank Ltd and Woolworths Limited shares plunge

Shares of ASX titans Woolworths Limited (ASX: WOW) and National Australia Bank Ltd (ASX: NAB) have today been mercilessly sold off…

NAB and WOWSource: Yahoo! Finance

Down 4.1% and 4.6%, respectively, Australia’s largest supermarket operator and the third largest bank have each been caught up in a vicious global sharemarket selloff.

National Australia Bank shares are down a whopping 11.8% in a single month. Having climbed to a high of $34.82 earlier this month, the leading $81 billion business bank has been unable to avoid the market’s wrath despite recently posting a respectable third-quarter trading update.

Meanwhile, the market is eagerly awaiting the latest report from Woolworths – due later this week – following a strong profit update from rival Wesfarmers Ltd (ASX: WES) last week. Indeed, despite operating our country’s largest supermarket network and providing non-discretionary goods to many millions of Australians every week, the market took a scalpel to 4.1% of the company’s shares today.

Is it time to buy in?

I’ve previously noted that my fair value estimate for Woolworths shares is between $27 to $28. However, while they may appear cheap at a current price of $25.29, before I buy more shares I’m waiting to see how the group reports this week – I suggest you do the same.

As for National Australia Bank Ltd shares, I’ve also pegged fair value around $28. However, that figure did not include the bank’s recent record-breaking capital raising or APRA’s changes to risk-weights on investor loans. At $29.71, NAB shares would have to drop to around $20 (so to ensure a healthy margin of safety) before I’d get excited about buying shares.

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Motley Fool contributor Owen Raskiewicz owns shares of Woolworths Limited.

Owen welcomes your feedback on Google+ (see below), LinkedIn or you can follow him on Twitter @ASXinvest.

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.