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BHP Billiton, Commonwealth Bank, & Telstra 2012 Charts Review

January 15th, 2013 · Greg Atkinson · 2 Comments

Today I am going to review the 1 year performance of three ASX listed blue-chip stocks namely: the Commonwealth Bank of Australia (ASX:CBA)  BHP Billiton (ASX:BHP) and Telstra Corporation (ASX:TLS) to get a feel for how these large companies within the S&P/ASX 200 Index fared during 2012.  Does the performance of these stocks give us any indication of how the wider stock market may fare in 2013 and if so, are these stocks worth watching over the next 12 months?

Last year the mining boom either fizzled out or took a breather depending on who you listen to. My view is basically that the mining sector is in a cyclical downturn as has happened before and will happen again.

So let’s start off by looking at the 2012 chart for BHP Billiton and see how its share price moved throughout the year.

BHP Billiton (ASX:BHP) 2012 Stock Price Chart

bhp_2012_share_price_chart

BHP shares closed the year higher and during the middle of the year, canny stock market investors would have been able to pounce when the  stock was near $30. So if you got the timing right you could have finished the year with around a 20% gain by buying into this bluest of blue chip Australian stocks.

Timing the market is not my strong point so I didn’t jump into BHP shares during the year and I won’t be tempted to do so at current prices or at anything much above $30.

The reason is simple: I am still bearish regarding the Chinese economy and believe that the Chinese economy is still slowing despite the efforts of the government to prop up growth via building projects, lending & other measures.

Now let’s look at the Commonwealth Bank (ASX:CBA) – another widely held blue chip  stock.

Commonwealth Bank of Australia (ASX:CBA) 2012 Stock Price Chart

cba_2012_share_price_chart

CBA shares had a good year and ended 2012 up around 25%. That’s a great return especially when you factor in the fully franked dividends. As with the wider stock market, CBA shares rallied strongly during the second half of the year and are now probably a little pricey…for a while at least.

But as I wrote at the start of 2012 and again in my forecast for this year, it’s worth keeping an eye on blue chip stocks with a view to picking them up when they get into the over-sold zone. The trick is working out when there are in that zone of course which is easier said than done.

I own some CBA shares but didn’t add to my holdings in 2012. In fact I sold some when the shares popped over $62 with the long term aim of buying them back at below $55 at some point.  That will turn out to be either a smart move or another one of my many trading blunders!

Finally let’s have a look at the share price chart for Telstra Corporation Limited (ASX:TLS) or for me – the one that got away. See:  Stockwatch: Qantas (QAN), Telstra (TLS) and Onesteel (OST)

Telstra Corporation Limited  (ASX:TLS) 2012 Stock Price Chart

tls_2012_share_price_chart

Yes back in late 2011 I was pondering buying into Telstra when the share price was $3.11 but I held out waiting for it to get closer to $3.00.  How silly do you think I feel now?

After a weak start, Telstra shares cruised higher and higher during 2012 closing the year at $4.37 so a 30% or more gain was there for the taking. This year TLS shares have moved even higher just to add salt to my wounds!

My problem last year was conviction. It’s easy to talk about picking up battered down stocks but knowing when to buy and having the  confidence to do is another matter entirely.

So during 2013 I will be closely watching these stocks again and if the opportunity presents itself and I have enough confidence, I will look at picking up some relatively small parcels in each of them.

Together these three stocks I believe will be good pointers to how the wider ASX 200 & All Ords will move in 2013 although I expect BHP to be the weaker of the three.

Finally please remember – I bought into Babcock & Brown during the GFC so please do your own research and never treat anything I write as qualified (or even semi-qualified) financial advice!

Greg Atkinson is the editor of Shareswatch Australia and the Managing Director of Ohori Capital He is originally from Australia but currently resides in Japan. He can be followed on twitter via @GregAtkinson_jp


2 responses so far ↓

  • 1 Stillgotshoeson // Jan 16, 2013 at 4:01 pm

    They are staying higher for longer than I had anticipated.

    I like BHP over RIO as it is a more diverse company with fingers in different pies.

    All the banks imho are still over valued and I thing Telstra has had a very good run up.

    Interesting article on businessspectator about bank term deposit rates slowly rising again as banks seek to regain some of the lost deposits of retirees that have found there way into “defensive” good dividend yeild paying shares. (like the banks and Telstra)

    businessspectator.com.au Bank Depositors Fight Back by Robert Gottliebsen

    Market volatility will continue with a reasonable pull back in the ASX on the cards. I still think an even larger pull back is on the cards as this GFC continues to pan out.

    Buying opportunities may yet present themselves over the short to medium term.

    Avoid/paydown debts, save some money and be ready to take advantage of any opportunities that come up.

  • 2 Greg Atkinson // Jan 17, 2013 at 8:56 am

    I am surprised the market has held up and actually crept higher since the New Year. I guess some of it has to do with investors chasing a higher yield since bank deposit rates have fallen and a lot of cash in term deposits will be looking for somewhere to sit over the next weeks/months.

    But money flowing from one asset class to another in the search of a better return is not always healthy so I am not tempted to buy any of the above stocks for now.

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