On Monday I looked at a few shares that leading brokers had given buy ratings to this week.
Today I thought I would look at the unfortunate shares which have been given the dreaded sell rating. Here are three that caught my eye:
Aurizon Holdings Ltd (ASX: AZJ)
According to a note out of Ord Minnett, its analysts have retained its sell rating and $4.00 price target on Aurizon’s shares despite it announcing plans to challenge the Queensland Competition Authority’s draft decision. Aurizon wants the Queensland Supreme Court to assess whether the draft was affected by legal error because the QCA did not afford procedural fairness to the company due to Professor Green’s conflict of interest and the apprehension of bias. The broker believes that Aurizon’s shares do not reflect the significant risks associated with the final outcome. I would agree with Ord Minnett on this one and think investors ought to stay clear of it despite the recent development.
JB Hi-Fi Limited (ASX: JBH)
A note out of Credit Suisse reveals that its analysts have retained their underperform rating and $21.36 price target on this leading retailer’s shares. According to the note, the broker believes that the market may be expecting too much from JB Hi-Fi and pointed to weak shopping centre foot traffic as a key risk. Its analysts estimate that over one-fifth of the company’s stores are based in shopping centres. I think Credit Suisse makes a valid point here and investors may want to consider waiting for a trading update before deciding whether to pick up shares.
Northern Star Resources Ltd (ASX: NST)
Analysts at Deutsche Bank have retained their sell rating and $4.90 price target on this gold miner’s shares following its recent update. The broker appears doubtful that Northern Star will be able to deliver on expectations in FY 2018 after a soft March quarter. As I’m a bit of a gold bear at the moment I would have to agree with Deutsche on this one. Interestingly, Credit Suisse also put an underperform rating on its shares today with a lower price target of $4.55.
While those shares might be the ones to sell, these shares are definitely the ones to buy 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 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.