Top brokers name 3 ASX shares to sell

On Thursday I had a look at a few shares that brokers had named as buys this week.

Today I thought I would look at the shares that have fallen out of favour with brokers and have been given sell ratings. Three that caught my eye are listed below:

Bank of Queensland Limited (ASX: BOQ)

According to a note out of Morgan Stanley, its analysts have retained their underweight rating and reduced the price target on the regional bank’s shares to $11.00 from $11.40. Its analysts believe Bank of Queensland’s margins are peaking and expects it to reveal slowing earnings growth when its reports its earnings next month. While I wouldn’t necessarily be a seller of its shares if I owned them, I wouldn’t be a buyer either. I think the big four banks are far more attractive right now.

Sigma Healthcare Ltd (ASX: SIG)

Following the release of its half-year results yesterday, analysts at Citi have retained their sell rating and cut the price target on Sigma Healthcare’s shares to 70 cents from 74 cents. According to the note, Citi believes that its shares are overvalued relative to its peers and expects the company to progressively lose Chemist Warehouse as a customer when its current supply contract ends in June 2019. I completely agree with Citi on this one and think investors should stay well clear of Sigma.

Synlait Milk Ltd (ASX: SM1)

A note out of the equities desk at Macquarie reveals that its analysts have downgraded the dairy processor to an underperform rating from neutral. The broker has, however, lifted the price target on Synlait Milk’s shares to NZ$7.00 (A$6.55). According to the note, although the first-half results came in ahead of the broker’s expectations, it has made the downgrade on valuation grounds. While its shares are not cheap, I think infant formula demand could generate strong enough growth to justify the premium. I would class them as a hold.

While those shares may be classed as sells, these top stocks are certainly strong buys in my opinion.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Scott Phillips.

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.