On Thursday I had a look at three shares that had found favour with brokers and been given the much-coveted buy rating.
Today I thought I would look at the other side of the coin, at the shares that have fallen out of favour and been given the dreaded sell rating.
Here are three that caught my eye:
Beach Energy Ltd (ASX: BPT)
According to a note out of Citi, its analysts have retained their sell rating and reduced the price target on the energy company’s shares to $1.14 after its latest production update came in weaker than expected. The broker did, however, take note of its strong levels of free cash flow. But this wasn’t enough to warrant a change of rating. While I wouldn’t necessarily be a seller of its shares if I owned them, I think there are better options elsewhere in the industry.
Computershare Limited (ASX: CPU)
A note out of Deutsche Bank reveals that its analysts have retained their sell rating and $15.10 price target on the shares of Computershare following its investor day earlier this week. While the broker has noted management’s plans to simplify its business and make it more transparent, it isn’t enough to offset its concerns over the sustainability of its mortgage servicing margins. I would agree with Deutsche on this one and think investors can find better value elsewhere.
Western Areas Ltd (ASX: WSA)
Analysts at UBS have retained their sell rating but increased the price target on the nickel producer’s shares from $2.80 to $3.02. According to the note, UBS felt the latest quarterly update was weak and appears disappointed that its full-year guidance has been trimmed. However, favourable nickel price movements have led to an improved price target. I’m quite bullish on nickel due to supply concerns and increased demand from battery manufacturers. But after a strong run Western Area’s shares may be getting close to fully valued now.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Computershare. 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.