Blue-Chip Slackers

Investors are thrilled with the way the sharemarket has performed in the first three months of 2006, and who wouldn’t be? The ASX200 recorded gains of 7.7% and the All Ordinaries leapt 8% over the same period. Despite the roaring bull market, now might be the right time to re-examine your portfolio. Exposure to one or more underperformers could drag your investments down in spectacular fashion.
We’ve compiled a list of the worst performing stocks over the March quarter from the S&P ASX50. Two of the worst offenders have been Telstra and Telecom New Zealand. Most of us are familiar with the story of Telstra’s punch-drunk market value but spare a thought for its Kiwi counterpart: investors have watched their holdings shed almost 16% of their value since celebrating the new year. Telecom New Zealand is now rumoured as a potential LBO opportunity.

Telcos aren’t the only big names on our list. Macquarie Bank and Wesfarmers have both shed more than 5% over the same period. Macquarie Bank has softened considerably under investor scrutiny of its generous fee structure, while Wesfarmers slid more than 2.5% over a week after long-time supporter Merrill Lynch downgraded it from “buy” to “hold”. Over the entire quarter, Wesfarmers fell by a total of 5.6%.

Even the resource sector has not managed to escape. Since hitting a record high of $13.47 on February 1 Santos has been in a steady decline, which was in no way helped by going ex-dividend in late February. Over the quarter Santos fell by 7%.

Household names such as Qantas, Coca-Cola Amatil and Foster’s all have the potential to make a big impact on your portfolio. Investors in Qantas should pay particular attention to their bottom line: the airline has had more than 12% of its stock value wiped off. Coca-Cola Amatil has shed more than 6% and Foster’s about 5%.

Lend Lease has had its ups and downs over the last 10 years, much like any company involved in the construction and management of major projects. Over the March quarter, Lend Lease has certainly been caught in a “down” as it softened by 4.5%. Blue-chip shopping centre giant Westfield also gets included, with investors bidding adieu to 5.8% of the company’s market value over the March quarter.