The Australian share market is home to a number of high-quality blue chip shares.

However, with so many for investors to choose from, it can be difficult to decide which ones to buy.

To narrow things down, I’ve picked out three blue chip shares which I think are great options for investors right now. They are as follows:

Coles Group Ltd (ASX: COL)

The first blue chip to consider buying is Coles. I think it could be great long term option due to its solid growth potential thanks to its defensive earnings, expansion opportunities, and its refreshed strategy. In respect to the latter, the Smarter Selling pillar of its strategy is aiming to deliver $1 billion in cumulative savings by FY 2023. This will be through initiatives including the use of technology to automate manual tasks and simplifying above-store roles to remove duplication.

CSL Limited (ASX: CSL)

Another blue chip share to buy is CSL. I believe the global biotherapeutics giant is one of Australia’s highest quality companies and a great buy and hold option. This is due to the strength and growth potential of its CSL Behring and Seqirus businesses. I believe CSL’s Behring business in particular is well-placed for growth thanks to increasing demand for immunoglobulins, its growing plasma collection network, and burgeoning research and development pipeline. 

Telstra Corporation Ltd (ASX: TLS)

A final blue chip share to consider buying is Telstra. I like the telco giant due to its attractive valuation and the solid progress it is making with its T22 strategy. This strategy is creating a much leaner operation and one which I believe could return to growth in the coming years. Especially given the improving trading conditions in the telco industry and the arrival of 5G internet. The latter could give Telstra’s mobile revenues a major boost in the next few years.

More reading

• 3 top ASX dividend shares to buy in June
• How to pick better shares and earn better returns
• The ASX 200 just hit an 11-week high. Here are 3 reasons we might be in overvalued territory
• What ASX investors can do before 30 June to save tax
• CSL shares have underperformed the ASX 200 over the past month. What’s going on?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One of the best performing areas of the market today has been the banking sector.

The big four banks have all recorded strong gains today and are powering the S&P/ASX 200 Index (ASX: XJO) notably higher.

What’s happening in the banking sector today?

Here’s a snapshot of what is happening in the banking sector this afternoon:

• The Australia and New Zealand Banking GrpLtd (ASX: ANZ) shares price is currently up 4.75% to $16.33.
• The Commonwealth Bank of Australia (ASX: CBA) share price is up 1.5% to $59.89.
• The National Australia Bank Ltd. (ASX: NAB) share price has pushed 4% higher to $16.38
• The Westpac Banking Corp (ASX: WBC) share price is the best performer with a 5% gain to $16.10.

Why are the big four banks charging higher today?

With no news out of any of the banks or broker notes that I’m aware of, today’s strong gains are a little bit of a mystery.

However, I suspect that investors are buying the big four banks on the belief that they have been oversold during the pandemic.

Australia will undoubtedly suffer economically from the pandemic, but the surprisingly low infection rate and the rapid reopening of the country appears to have caught even the most positive economists by surprise.

Combined with the Federal Government’s stimulus packages and the Reserve Bank’s rate cuts, Australia’s economic future doesn’t look anywhere near as bleak as other countries.

This could ultimately mean that the big four banks have overestimated the provisions they have announced over the last few weeks. Especially if a successful vaccine is developed sooner rather than later.

What provisions have the banks made?

As a reminder, National Australia Bank was the first bank to announce provisions. On 27 April it revealed an $807 million top-up to its economic adjustment to reflect potential COVID-19 impacts.

This was followed the next day by Westpac, which announced approximately $1.6 billion of additional impairment charges predominantly related to COVID-19 impacts.

Within two days, with its interim results, ANZ Bank announced COVID-19 impacts of $1.031 billion.

And the last bank to move, was the Commonwealth Bank. Earlier this month Australia’s largest bank made an additional credit provision of $1.5 billion for the potential longer term impacts of COVID-19.

If things go better than expected, these provisions could be partially reversed. Which would be a big boost to their future dividends.

Should you buy the banks?

Even after their strong gains this week, I still see a lot of value in the big four banks and would be a buyer of all of them at these levels.

Though, my preference remains Commonwealth Bank due to its overall quality.

More reading

• The ASX 200 just hit an 11-week high. Here are 3 reasons we might be in overvalued territory
• ASX 200 up 1.8%: Big four banks jump higher, Flight Centre and Webjet rocket again
• Where will the NAB share price be in 1 year?
• Is the ANZ share price a buy?
• Why I would buy CBA and these ASX dividend shares

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why ANZ, CBA, NAB, and Westpac shares are storming higher today appeared first on Motley Fool Australia.

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Is the Webjet Limited (ASX: WEB) share price a buy? It has been an amazing performer recently.

In just one month the Webjet share price has risen by 94%. There have been other shares that have recovered strongly from the coronavirus lows like Afterpay Ltd (ASX: APT), but Webjet is one of the ones that are cut off from almost all of the customer base.

When Webjet did the capital raising it was planning for the eventuality of needing to survive until around the New Year without any material revenue. It doesn’t seem that dire now. 

But things seem to be getting back to normal quicker than expected. Travel within each Australian state is being encouraged. There’s plans for travel across the entire country. There will hopefully be a travel link with New Zealand sooner rather than later. Things are looking up. 

Does the Webjet share price represent good value?

It was only two weeks ago when I said that the Webjet share price was cheap at a share price of $3.24. Since then it has risen around 35%.

Between now and then I said it might be wise to take some profit off the table. I’m even more of that belief now. Remember that there are a lot more Webjet shares on issue that there used to be, so future earnings will be shared with more shares.

At the moment there still isn’t much travel going on. The coronavirus seems as though it’s going to be around in the world for some time, so international travel could be very limited until 2021.

In 2030 I think we’ll be looking at a much higher Webjet share price. But I worry that today’s share price may be too optimistic. All of the coronavirus impacts are still to play out. Retirees may be less willing to leave their respective countries right now. Earnings may not bounce back as much in the near term as expected with this share price.

More reading

• The ASX 200 just hit an 11-week high. Here are 3 reasons we might be in overvalued territory
• ASX 200 up 1.8%: Big four banks jump higher, Flight Centre and Webjet rocket again
• Why Cann, IAG, Monadelphous, & Webjet shares are storming higher
• Is it too early to buy Webjet shares?
• ASX 200 jumped higher, rises more than 2%

The post Up another 5%: Is the Webjet share price a buy? appeared first on Motley Fool Australia.

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