On Thursday I had a look at a number of shares which had been given buy ratings by leading brokers.
Today I thought I would look at the other side of the spectrum at the shares which brokers think investors should avoid.
Here are three shares that have sell ratings or equivalents on their backs:
Boral Limited (ASX: BLD)
According to a note out of Citi, its analysts have retained their sell rating and $6.20 price target on the building materials company. Although the broker is more upbeat on its U.S. operations now, it is keeping its powder dry until there are signs of improvement in non-residential construction activity. Due to the premium its shares trade at, I would have to agree with Citi on this one. If Boral were trading on a more reasonable earnings multiple, I would consider an investment today.
Myer Holdings Ltd (ASX: MYR)
Following the release of its full-year results yesterday, analysts at Credit Suisse have downgraded the department store operator to an underperform rating and lowered its price target to 67 cents. The investment bank's analysts doesn't appear to be impressed that Myer's future earnings growth appears to be based on cost reductions rather than sales growth. I agree with Credit Suisse on Myer and believe investors would be best off avoiding it no matter how cheap it may appear.
Newcrest Mining Limited (ASX: NCM)
A note out of UBS reveals that its analysts have retained their sell rating and $14.00 price target on the gold mining giant. Although the remediation and upgrade work required to recommence use of Cadia East's Panel Cave 1 crusher chamber has now been completed and should lead to Cadia returning to nameplate production by March, the broker continues to rate Newcrest as a sell. I think UBS is spot on with this one and believe Newcrest's shares are very expensive at present. Investors looking to gain exposure to the gold miners would find better value elsewhere in my opinion.
