3 blue chip stocks crunched by the market today

ASX hits new 15-month highs, but that didn't help these three

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published October 19, 2012 5:21 pm AEDT

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) rose for the fourth day in a row, adding 0.3%, to close at 4,571.1, its highest level in 15-months, despite weak leads from Wall Street overnight. The index posted a rise of 1.9% for the week. Information technology and telecommunications were the best performing sectors today, while financials and healthcare both ended in the red.

Amongst the top 50 stocks, these were the worst three performers.

National Australia Bank (ASX: NAB) down 2.7% to end at $26.22, after the bank increased its bad-debt provisions by $250 million, amid warnings that a slowing Australian economy and ongoing issues in the UK could have an impact on earnings. That's despite reporting cash earnings of $1.4 billion for the fourth quarter. Here at the Motley Fool, we've have been warning investors of risks to our major banks, including low credit growth.

Westfield Retail Trust (ASX: WRT) fell 1.7%, or 5 cents to close at $2.98. That's possibly due to investors switching from safe, defensive assets, like property trusts – or A-REITs as they are now known, into riskier assets such as resources and cyclical stocks. With WRT paying a distribution yield of just 4.2% – less than a bank deposit – the company doesn't appear to offer a competitive income stream that investors can find in other assets.

Newcrest Mining Limited (ASX: NCM) lost 1.6% to end at $27.51, after the price of gold fell US$1.95 overnight to US$1,741 an ounce. The company also announced yesterday that it would produce between 2.3 million and 2.5 million ounces of gold this year, despite gold production falling to its lowest quarterly production levels in two and half years. Problems at several of its mining sites during the quarter affected output.

If you only invest in one company this year, make it our "Top Stock for 2012-13". Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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