The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has performed well this year and is just a fraction away from breaking through the 6,000 points mark.
Unfortunately not all shares on the index have performed so well. In fact, the three blue-chips listed below have had a terrible time of late. Does this make them bargain buys?
The Coca-Cola Amatil Ltd (ASX: CCL) share price tumbled 13% in April after the beverage company downgraded its full-year guidance on the back of difficult trading conditions in its Australian beverages division. Although one broker thinks this is just a temporary headwind and expects things to improve, at around 18x underlying earnings I see little value in owning its shares today. I would suggest investors wait for its shares to fall to a level befitting the company's current growth profile.
The Fortescue Metals Group Limited (ASX: FMG) share price has fallen 23% in the last three months after the iron ore price fell back down to Earth. Whilst I think that Fortescue Metals is one of the best options in the resources sector, I still believe that the iron ore price has further to fall. This could drag Fortescue's share price down along with it. In light of this I feel investors should hold off making an investment at this point.
The Telstra Corporation Ltd (ASX: TLS) share price has dropped 16.5% so far this year. Concerns over the impact the NBN and the new TPG Telecom Ltd (ASX: TPM) mobile network will have on its business are largely behind the decline. While these are valid concerns, I still feel that market has overreacted somewhat. So with its shares providing a trailing fully franked 7.3% dividend, I think Telstra could offer investors a compelling risk/reward.