The Australian share market has returned to form today and is pushing higher in afternoon trade. This small rise has extended the year to gain by the S&P/ASX 200 index to a solid 8.7%.
But not all shares on the benchmark index are climbing as strongly in 2019.
Two popular blue chip shares that are underperforming the index this year are listed below. Are they in the buy zone?
Cochlear Limited (ASX: COH)
The Cochlear share price is up 0.5% year to date and down 20% since hitting an all-time high of $221.44 in September. This decline has been driven by news that a U.S. federal judge has ordered the company to pay US$268 million in damages to the Alfred E. Mann Foundation for Scientific Research for a patent dispute. Whilst this is disappointing, I feel the market has priced this into its shares now. This could make it an opportune time to invest in the company, especially given its exposure to the ageing population tailwind. I believe this tailwind, the quality of its products, and its wide distribution network have positioned the company well to deliver strong earnings growth over the next decade.
Coles Group Ltd (ASX: COL)
This supermarket giant's shares may be pushing higher today after announcing an exclusive services agreement with Ocado Group, but they are up just 2.5% since the start of year and down 10% from their 52-week high. A softer than expected half year result is largely behind the underperformance of the company's shares this year. One broker that sees this as a buying opportunity is Goldman Sachs. According to a note out of the investment bank, it has a buy rating and $13.10 price target on the company's shares. It was happy with the Ocado deal and believes Coles will benefit greatly from it. I agree with this view and believe Coles' shares are trading at an attractive level for patient buy and hold investors. The same could also be said for former parent Wesfarmers Ltd (ASX: WES) which I also rate as a buy.
