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Top brokers name 3 ASX shares to sell

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

Today I thought I would look at a few shares which have been given the dreaded sell rating.

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

Asaleo Care Ltd (ASX: AHY)

According to a note out of Citi, its analysts have retained their sell rating and $1.25 price target on the personal care products company’s shares ahead of its annual general meeting on Monday. The broker believes that higher pulp costs and rising competition in the market could weigh on its performance in FY 2018 and beyond. Citi appears concerned that this could lead to its shares derating further in the future. I would agree with Citi on this one and think investors would be better off looking elsewhere in the industry.

Australian Pharmaceutical Industries Ltd (ASX: API)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and cut the price target on the pharmacy operator and distributor’s shares from $1.65 to $1.43. The broker has made the move in response to the company’s weak results release yesterday. Its analysts feel that weak consumer sentiment and growing distribution headwinds are going to negatively impact the company in the short term. I agree with Morgan Stanley and didn’t see anything in yesterday’s result that made me believe things would improve in the near term.

St Barbara Ltd (ASX: SBM)

Analysts at Citi have also retained their sell rating on this gold miner after its latest quarterly update. While the broker was pleased with the grade of the gold St Barbara produced during the March quarter, the amount produced was weaker than expected. Citi has held firm with its price target of $3.70 for St Barbara’s shares. As I’m reasonably bearish on gold prices due to rising rates in the United States, I would have to agree with Citi on this recommendation as well.

While they may be the shares to sell, my money is on these shares being the ones to buy.

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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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