Is it time to buy Woolworths Ltd, CSL Limited and National Australia Bank Ltd. shares?

Woolworths Limited (ASX: WOW), National Australia Bank Ltd. (ASX: NAB) and CSL Limited (ASX: CSL) are three of Australia’s largest and most well-known public companies, holding prominent positions in their respective industries. But should you be buying shares in them today?

Let’s take a brief look at each company’s shares.

  1. Woolworths Ltd

Woolies shares have endured a tough run in recent times. Competition within its supermarkets business, a loss-making hardware chain and the general complacency of senior management have taken a toll on profits and its share price. Unfortunately, despite shares falling more than 25% in a year, the outlook for Woolworths’ share price is anything by clear-cut. With the company in the midst of divesting its Home Improvement business and a lacklustre performance from supermarkets business, the time may not be right to buy Woolworths shares.

  1. National Australia Bank Ltd.

Like Woolworths, NAB is also taking bold steps to turn its fortunes around. Over many years, NAB has meaningfully underperformed its major bank peers because of its non-core assets, primarily in the UK and USA. While the bank is continuing ahead with the divestment of Clydesdale and Yorkshire Banking Group (its UK subsidiary) to public markets, shareholders also have to contend with the cyclical downtrend in Australia’s banking sector. Further, competition is increasing, digital disruption is ever-present and tougher bank lending standards are also on the cards.

  1. CSL Ltd

CSL is arguably the only company on this list with a durable competitive advantage. It has proven to be an outstanding business to own over the ultra-long-term, having grown into one of Australia’s largest publicly-listed companies (it is currently the ASX’s 8th largest company). According to analyst consensus estimates, the global biopharmaceuticals business is expected to grow profits modestly in coming years. While shares may appear pricey at their current price-earnings ratio of 28x, long-term holders could see value in the company at today’s levels if it can continue to grow strongly.

Foolish Takeaway

I’m not a buyer of NAB or Woolworths shares at today’s prices. And while I think CSL shares are a little pricey today, it’s certainty worthy of a spot on savvy long-term investors’ watchlists.

A better buy than CSL, NAB and Woolies

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Motley Fool writer/analyst Owen Raszkiewicz owns CSL shares and has a financial interest in Woolworths. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. 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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