On Thursday I looked at three shares that had found favour with brokers and been given buy ratings.
Today I thought I would look at the other side of the coin, at the shares that broker have given sell ratings to.
Three shares that caught my eye are listed below. Here’s why they have been rated as sells:
Auckland International Airport Limited (ASX: AIA)
According to a note out of Goldman Sachs, it has retained its sell rating and NZ$6.35 (A$5.81) price target on the airport operator’s shares after it released its latest passenger numbers. Although total passenger movements are in line with the broker’s expectations and its strategic and operational growth prospects remain positive, Goldman is wary of the constraints on its cash flows under the current investment plan. Especially given its proposed development pipeline remains exposed to rising construction inflation and timing delays. While I probably wouldn’t be a seller if I owned its shares already, I wouldn’t be in a rush to buy at this price.
Domain Holdings Australia Ltd (ASX: DHG)
A note out of Citi reveals that its analysts have retained their sell rating and $2.80 price target on the property listings company’s shares. According to the note, its analysis shows that REA Group Limited (ASX: REA) is still dominating the market and could mean Domain needs to increase its marketing spend considerably to compete. I would agree with Citi on this one and think investors would be better off skipping Domain and buying REA Group shares instead.
Santos Ltd (ASX: STO)
Analysts at Citi have downgraded this energy producer to a sell rating with a $5.30 price target after it rejected Harbour Energy’s takeover approach. The broker appears concerned by comments out of the latter after conducting its due diligence. Citi has based its valuation on the oil price being at US$55 a barrel in the long term. I like Santos but I wouldn’t be a buyer unless its shares came down to a level close to Citi’s price target. I believe at that level it would offer a more compelling risk/reward.
Those shares may be rated as sells, but I'm betting that brokers would have buy ratings on these hot stocks.
We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.
That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Cochlear or REA Group.
We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. 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.