Sentiment can be everything on the market. When brokerages turn against shares, it can send them hurtling down to new lows. Conversely, when brokerages speak positively of shares and put that all important upgrade on them, the opposite can happen and the shares may jump.
Although the initial move may be sudden, it does have a tendency of shifting the overall momentum of the shares positively or negatively depending on the recommendation.
Three shares with recent consensus buy recommendations according to CommSec, the brokerage of arm of Commonwealth Bank of Australia (ASX: CBA), are as follows:
Appen Ltd (ASX: APX)
Appen provides language technology data and services in more than 140 languages and dialects to leading technology companies and government agencies.
This exciting Australian technology company was given a consensus strong buy rating on Tuesday, and I must admit to not being entirely surprised.
Although still a relatively small company, Appen has an impressive and profitable business that counts Microsoft amongst its clients. With no debt and strong earnings growth, this could be a company to keep a very close eye on.
Bega Cheese Ltd (ASX: BGA)
Bega Cheese was upgraded to a consensus moderate buy recently. The initial news sent the shares around 10% higher. With Bell Potter placing a price target of $6.69 on the shares, this still leaves upside in the region of a further 10%.
Much of the optimism has been placed on its link up with Blackmores Limited (ASX: BKL). The two companies will be looking at taking advantage of the insatiable Chinese demand for infant formula with a joint venture.
Breville Group Ltd (ASX: BRG)
Following a good half-year report, Breville was also upgraded to a consensus moderate buy. The key takeaway from this upgrade is that it came after the recent rally that saw the shares climb by around 35%. This could be an indication that the market still expects strong growth ahead for its shareholders.
It is worth pointing out that despite the 35% rise, the shares are still only up by 3.5% year to date. If the company can keep growing its businesses in the United States and the United Kingdom, I expect its strong earnings growth could continue for a number of years.
Foolish takeaway
Whilst I don't agree with every brokerage upgrade, these are in my opinion three shares which look like great investments.
