The South32 Ltd (ASX: S32) share price has not had a great start to the week. In afternoon trade the mining giant's shares are down 3% to $3.32.
Not that long-term shareholders will be too bothered. Even after factoring in today's decline, South32's shares are up 21% year-to-date.
What happened?
With no news out of the company, today's decline is likely to be related to a broker note out of Ord Minnett this morning.
According to the note, the broker has downgraded South32's shares to a hold rating from buy and retained its $3.40 price target.
The broker believes that South32's shares have rallied strongly this year and are now fully valued. Furthermore, it is concerned that the local market is overweight resources shares at present and that share prices could be in danger of declines should investors rotate to other sectors next year.
Is it time to lock in your gains?
It could be. Earlier this month I wrote about how Deutsche Bank had turned negative on its prospects due to its belief that its costs could rise by as much as 20% in FY 2018.
With sentiment shifting more negatively by the week, I think investors ought to consider taking profit and reinvesting elsewhere. Investors wanting to reinvest the proceeds back into resources shares might want to consider BHP Billiton Limited (ASX: BHP) or Mineral Resources Limited (ASX: MIN).
