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Leading brokers name 3 ASX shares to sell

Earlier in the week I had a look at a number of shares which have been labelled as buys by leading brokers.

Today I thought I would take a look at three shares which have unfortunately been labelled as sells. Here they are:

Vocus Group Ltd (ASX: VOC)

According to a note out of the Macquarie equities desk, its analysts have downgraded the telco company to an underperform rating with a $3.05 price target. The broker appears to be concerned by the intense competition in the industry and its current valuation following a strong run higher since September. While I wouldn’t necessarily be in a rush to sell, I wouldn’t be a buyer of Vocus shares right now either. If they were close to $2.50 I would be interested.

Whitehaven Coal Ltd (ASX: WHC)

A note out of Citi reveals that its analysts have downgraded the coal miner to a sell rating from neutral and placed a $4.20 price target on its shares. Citi made the move after Whitehaven Coal fell short of the broker’s December quarter production estimates yesterday. The coal miner also downgraded its full-year production guidance from the range of 22Mt to 23Mt to a new range of 20.5Mt to 21.0Mt due to issues at its key Narrabri operation. Its shares have fallen since the release and do look a little more attractive now, but I wouldn’t be a buyer unless coal prices increased strongly over the coming months.

Woodside Petroleum Limited (ASX: WPL)

Analysts at Citi have also given this energy producer a sell rating following the release of its latest production update. The broker has, however, lifted it price target slightly on Woodside’s shares to $26.86. Although the company beat the broker’s estimates, it hasn’t been enough to warrant a change in recommendation. Citi is of the opinion that the current share price incorporates bullish oil prices of close to US$80 per barrel. I would have to agree with Citi on this one as well and would rather gain exposure to the energy sector through an investment in BHP Billiton Limited (ASX: BHP).

Whilst those shares may be classed as sells, I think these top quality shares ought to be classed as strong buys today.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Vocus Communications 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.

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