Leading brokers name 3 ASX shares to sell

On Monday I had a look at three shares that have found favour with brokers this week and been given the much-coveted buy rating.

Today I thought I would look at the shares that have fallen out of favour with brokers and are the unlucky recipients of the dreaded sell rating.

Three that caught my eye are listed below:

Asaleo Care Ltd (ASX: AHY)

According to a note out of Credit Suisse, its analysts have downgraded the personal care products company’s shares to an underperform rating from neutral. The broker has also reduced its price target on Asaleo Care’s shares to $1.30 from $1.35 after revising down its earnings forecasts. Credit Suisse made the revisions after factoring in rising raw material costs. I would agree with Credit Suisse on Asaleo Care and think there are far better options in the retail sector for investors to choose from.

Boral Limited (ASX: BLD)

Another note out of Credit Suisse reveals that it has also downgraded this building materials company’s shares from neutral to an underperform rating. The broker has slashed the price target on Boral’s shares to $6.40 from $7.45. Credit Suisse has made the move largely on concerns that the market is expecting too much growth from its North American operations. While I do agree with Credit Suisse, I’m not sure I would be rushing to sell its shares just yet. After all, they are currently trading at a 52-week low, are down almost 25% from their 52-week high, and below the broker’s target price.

Medibank Private Ltd (ASX: MPL)

Analysts at Goldman Sachs have retained their sell rating and $2.70 price target on the private health insurer’s shares following the release of APRA’s private health insurance (PHI) industry data for the March 2018 quarter. That data revealed a further 0.3% decline in policyholder growth, leading to the proportion of the population covered by hospital PHI falling to 45.5%. Goldman remains negative on the PHI industry due largely to affordability headwinds and political uncertainty. I agree with Goldman on this one and think investors ought to stay clear of Medibank Private for the time being.

While those shares may be the shares to sell, these top shares are the ones to buy in my opinion. I'm tipping them to beat the market in FY 2019.

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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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