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Top brokers name 3 ASX shares to sell

Yesterday I looked at three top shares that brokers have given the much-coveted buy rating to.

Unfortunately, not all shares are being looked on so favourably by brokers. Three which have fallen out of favour and been given the unwanted sell rating are listed below.

Here’s why brokers think investors should avoid them:

Asaleo Care Ltd (ASX: AHY)

According to a note out of Credit Suisse, it has retained its underperform rating and slashed the price target on this personal care products company’s shares to 78 cents from $1.30. The broker made the move on the back of Asaleo Care’s full-year profit guidance downgrade. Asaleo Care downgraded its guidance significantly after a disastrous first-half performance brought about by competitive pressures and higher pulp prices. I completely agree with Credit Suisse and think investors ought to stay clear of the company.

Northern Star Resources Ltd (ASX: NST)

Another note out of Credit Suisse reveals that its analysts have retained their underperform rating and $5.20 price target on this gold miner’s shares. While the broker acknowledges that its recent quarterly production was strong, it is very disappointed with its guidance of 600,000 to 640,000 ounces of gold in FY 2019. While I think Northern Star is one of the better gold miners on the ASX, I wouldn’t be a buyer of its or any of its peers right now.

Oil Search Limited (ASX: OSH)

Analysts at Citi have retained their sell rating and placed a $7.01 price target on this energy producer’s shares. The broker has held firm with its sell rating following Oil Search’s recent quarterly update. Although its guidance was in line with expectations and the broker sees value emerging from its Alaskan assets, its valuation appears to be an issue. Citi’s price target is around 18% lower than Oil Search’s current share price. I would agree with Citi and think investors would be better off gaining exposure to oil through more diversified options.

Those may be the shares to sell, but 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.

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