Is it time to buy Telstra Corporation Ltd, National Australia Bank Ltd. and Coca-Cola Amatil Ltd shares?

Credit: James Flynn

Telstra Corporation Ltd (ASX: TLS), National Australia Bank Ltd. (ASX: NAB) and Coca-Cola Amatil Ltd (ASX: CCL) each updated the ASX on their most recent financial performance this week.

Therefore, now is a great time to ask ourselves: Is it time to buy Telstra, NAB and Coca-Cola Amatil shares?


Telstra reported its half-year results this morning, showing a marginal 0.4% increase in profit. The company’s key businesses, such as Mobiles, saw a retraction in profit margins. While they’re minor in relative terms (the Mobiles’ operating profit margin fell from 40% to 39%), the bulk of Telstra’s share price valuation is held up by its core business lines, which have proven to be cash cows. There were some green shoots emerging from growth businesses.

While it’s too early for me to say whether today’s update was a positive or negative one for its intrinsic value, today’s result wasn’t spectacular, in my opinion.


National Australia Bank reported a first-quarter cash profit of $1.7 billion, an 8% gain on last year. Charges for bad debts were down, personnel costs were up and impaired assets ticked upwards. Subsequently, a number of prominent analysts moved to downgrade their price target on NAB shares. Personally, it doesn’t surprise me.

Indeed, although profit was up and the divestment of Clydesdale and Yorkshire Banking Group (ASX: CYB) is touted as good news, NAB is facing meaningful headwinds, in my opinion.

Coca-Cola Amatil

Coca-Cola Amatil said it remains on track to return to mid-single digit growth in earnings per share. The bottler and distributor of Coca-Cola products and popular alcohol beverages saw its revenue and profit rise modestly in its 2015 financial year. The company is dealing with challenging consumer trends and a potentially longer-term structural shift towards ‘healthier for you’ products, a market with which the Coca-Cola brand may not ordinarily be associated.

Although I have a financial interest in Coca-Cola Amatil shares (through a portfolio I run for my family – see below), I probably wouldn’t buy the company’s shares today even though they appear to trade slightly below intrinsic value.

Foolish takeaway

The recent results from these three ASX stalwarts were okay but not great. As investors looking to outperform the market over the long-term, short-term weakness is acceptable. However, it’s important to know when to pull the plug on a poor investment and how to differentiate between market noise, management bias and fact.

I’m not rushing out to buy any of these shares at today’s prices.

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Motley Fool writer/analyst Owen Raszkiewicz has a financial interest in Coca-Cola Amatil shares. 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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