Leading brokers name 3 ASX shares to sell

On Tuesday I had a look at a few shares that have found favour with brokers and been given buy ratings this week.

Today I thought I would look at the shares which have fallen out of favour with brokers and been given sell ratings.

Three that caught my eye are listed below. Here’s why they have been given sell ratings:

Nine Entertainment Co Holdings Ltd (ASX: NEC)

According to a note out of Citi, its analysts have retained their sell rating and $1.70 price target on the media company’s shares. The broker believes that winning the rights to the tennis from rival Seven will equate to an annual loss of up to $30 million for Nine. It suspects this to be a sign that the company may not be interested in retaining its cricket rights when they come up for renewal. I would agree with Citi on this one and think investors ought to stay clear of Nine’s shares.

Newcrest Mining Limited (ASX: NCM)

Analysts at UBS have retained their sell rating and $14.70 price target on the gold miner’s shares after it advised that it has resumed processing at its Cadia operation after an issue with its southern tailings dam. Newcrest has stated that it is still too soon to update its guidance, so brokers appear to be holding onto their current recommendations and price targets until this is released. I would suggest investors stay away from Newcrest until it releases its updated guidance.

Santos Ltd (ASX: STO)

A note out of Morgans reveals that its analysts have retained their reduce rating and $4.31 price target despite the energy company receiving a US$4.98 per share takeover offer from Harbour Energy. Morgans appears to believe that the deal could struggle to get FIRB approval due to the importance of GLNG and the Cooper Basin to Australian supply. While I’m not as bearish as Morgans is on Santos, I wouldn’t be a buyer of its shares after yesterday’s rally. At the current price I don’t think it offers a sufficient risk/reward given the issues that might arise with FIRB approval.

While those shares may be rated as sells, I think brokers will have buy ratings on these top stocks.

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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.

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