Leading brokers name 3 ASX shares to sell

On Tuesday I had a look at a few shares which had been given buy ratings this week by brokers.

Today I thought I would look at the other side of the coin, at the shares that brokers think are sells.

Three which caught my eye are listed below. Here’s why brokers think you should sell them:

iSentia Group Ltd (ASX: ISD)

According to a note out of the Macquarie equities desk, its analysts have retained their underperform rating and cut the price target on iSentia’s shares to 88 cents. The broker doesn’t appear to have been impressed with the media monitoring company’s half-year results and is waiting to see an improvement in operating conditions and revenues before making any changes to its recommendation. I would agree with Macquarie on iSentia and suggest investors stay clear of it no matter how cheap it looks.

Japara Healthcare Ltd (ASX: JHC)

Analysts at Morgan Stanley have retained their underweight rating and $1.60 price target on the aged care provider’s shares. Although Japara’s first-half result was in line with the broker’s expectations, it appears concerned that the second-half could be challenging. Whilst Japara did deliver a weak first-half, it is worth remembering that it was largely out of the hands of management. Its homes were hit by a severe flu outbreak, reducing its occupancy levels down dramatically. I think investors ought to look beyond this result and focus on its solid long-term growth prospects due to Australia’s ageing population.

Newcrest Mining Limited (ASX: NCM)

A note out of Credit Suisse reveals that its analysts have retained their underperform rating and $18.50 price target on the gold mining giant’s shares. The broker has held firm with its recommendation despite Newcrest announcing a US$250 million investment to acquire a 27.1% interest in Canada-based Lundin Gold. The general feeling in the market is that this deal isn’t going to move the needle much despite the sizeable price tag. I agree with Credit Suisse on this one. Even if I were not bearish on the gold price, I’d think Newcrest was expensive at 27x estimated forward earnings.

While those may be rated as sells, these top growth shares are almost certainly strong buys in my opinion.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended iSentia Group Ltd. 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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