Commonwealth Bank of Australia (ASX: CBA). The bank has delivered enormous returns to shareholders in recent years, but its shares are by no means in 'buy' territory. The bank's earnings could come under considerable pressure in the coming years and a buy today could result in years of market underperformance.
Telstra Corporation Ltd (ASX: TLS). Like Commonwealth Bank, Telstra's shares just aren't cheap enough to warrant a 'buy' today. Although the stock offers a very nice dividend yield, investors will likely realise better returns from other high-yielding stocks with greater growth potential.
BHP Billiton Limited (ASX: BHP). Having lost nearly one third of its value since August, BHP Billiton's shares are certainly looking tempting. While it deserves a position on your watchlist, the stock could continue to fall should iron ore and oil prices retreat any further. Until the volatility in the sector comesÂ off, an investment in BHP Billiton today remains too risky.
Medibank Private Ltd (ASX: MPL). The health insurer has garnered plenty of attention since floating in November, but this hype appears to have been priced into the company's shares. While I like the company, there is too much riding on its ability to cut costs and improve margins to justify its current valuation at $2.34 per share.