3 blue chip shares at 52-week lows: Are they bargain buys?

With the market sinking notably lower today after heavy declines in the United States, a number of shares have fallen to 52-week lows.

Three blue chips that caught my eye are listed below. Have they fallen into bargain territory or are they best avoided?

The Challenger Ltd (ASX: CGF) share price fell to a 52-week low of $11.49 during morning trade. This means the annuities company’s shares have now dropped over 20% from their 52-week high of $14.42 they made in December. While I think Challenger is a quality company, I think its shares are still a touch overvalued and intend to hold out for a drop to around the $10.50 mark. Incidentally, earlier this week Morgan Stanley retained its underperform and $11.00 price target on Challenger’s shares.

The QBE Insurance Group Ltd (ASX: QBE) share price has drifted to a 52-week low of $9.52 on Wednesday. The insurance giant has continued to come under significant selling pressure after a series of disappointing results. I’m not a fan of insurance companies and QBE Insurance in particular. I think insurance companies are unreliable investments and would suggest investors look elsewhere in the market.

The Telstra Corporation Ltd (ASX: TLS) share price touched on a new multi-year low of $3.20 this morning. Concerns over NBN margins, competitive pressures in the mobile space, and the security of its current dividend pay-out have all weighed heavily on sentiment. In respect to the former, I’m optimistic that the Federal Government will write down the NBN, allowing telco companies to benefit from wider margins. This and its high quality mobile network, could allow Telstra to continue paying its 22 cents per share fully franked dividend for some time to come. At the current price, this works out to a yield of almost 6.9%.

As well as Telstra, I think these stellar stocks are in the buy zone after recent declines.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger Limited and Telstra Limited. 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 Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.