MENU

3 ASX shares brokers think you should sell

A few days ago I picked out a few lucky shares which had found favour with brokers and been given buy ratings.

Today I thought I would look at a few shares which unfortunately didn’t find favour with brokers last week. So much so they have been given sell ratings. Here they are:

AGL Energy Ltd (ASX: AGL)

A research note out of Macquarie towards the end of last week reveals that its analysts reiterated their underperform rating and $24.30 price target on the energy provider. The reason for the negative sentiment was that the broker believed that electricity prices had reached a peak. Unfortunately for consumers this doesn’t appear to be the case. On Friday AGL revealed an 18% price hike in South Australia from July 1. Furthermore, New South Wales is facing a 16.1% increase in electricity prices and a 9.3% increase in gas prices also from July 1 according to the Fairfax press.

Caltex Australia Limited (ASX: CTX)

According to a research note out of Morgan Stanley, this fuel retailer has had its shares downgraded to an underweight rating with a $27.00 price target. The investment bank believes that the sale of its premium fuel has now peaked and expects increased premium fuel competition with its rivals to lead to lower volume sales. As premium fuel sales have been a key driver of growth for the company, it would be a big disappointment if they have peaked now. I would suggest investors approach Caltex with caution and keep a close eye on its premium fuel sales.

Wesfarmers Ltd (ASX: WES)

Analysts at Citi have reiterated their sell rating and reduced the price target on Wesfarmers’ shares to $38.10 following the conglomerate’s recent strategy briefing. Citi believes that Wesfarmers is going to struggle due to pressure on its Coles supermarket business and its UK expansion suffering from losses. I would agree with Citi on this one. The impact that the supermarket price-war has had on its Coles business is a big concern for me. Whilst its dividend yield is attractive, considering the risks it faces, I would only be a buyer at a much cheaper price.

Whilst you wait for Wesfarmers' shares to fall into the buy zone, here's one dividend share which I think is dirt cheap right now. In fact, it is so cheap its shares almost yield a fully franked 6% dividend today.

We've just released our #1 dividend pick for 2017. And the winner is...

With its shares up 155% in just the last five years, this 'under the radar' consumer favourite is both a hot growth stock AND our expert's #1 dividend pick for 2017. Now we're pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is click the link below!

Simply click here to receive your copy of our brand-new FREE report, "The Motley Fool's Top Dividend Stock for 2017."

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. 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 Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.