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3 ASX shares brokers are selling this week

We look to the experts for our buying and selling pointers, and notable brokers have these 3 stocks on their sell lists this week.

Integrated Research Limited (ASX: IRI)

Wilsons have placed a sell rating on software billings business Integrated Research Limited as a reaction to its recently handed down FY18 results.

Wilsons was unimpressed by the numbers, with Integrated Research logging an NPAT of $17 million – 10% lower than Wilsons expectations and EBITDA of $34.3 million – 8.8% below Wilsons expectations.

Wilsons says it has concerns Integrated Research’s results came in “soft” despite all currencies performing in the company’s favour and with “significant deterioration of organic bottom line earnings” see Integrated as a “structural sell”.

Wilsons believe the lack of top-line growth at Integrated can be attributed to a declining European unit with low growth also in the US and difficulties in its payments and IT infrastructure business units.

The broker considered the 4% year-on-year NPAT growth as driven mainly by a one-off write off of $1.6 million, whereas on a normalised basis, NPAT actually fell 14% – according to Wilsons.

The broker says “we would feel more comfortable to see Integrated Research investing more heavily in its product”.

Wilsons advice comes in as contrary to Bell Potter’s list of the “best shares to own in 2019” which included Integrated Research in its Technology picks alongside Citadel Group Ltd (ASX: CGL) and Technology One Limited (ASX: TNE).

Lifestyle Communities Limited (ASX: LIC)

CCZ Equities has made a recommendation to sell down independent living community company Lifestyle Communities Limited on account of its FY18 results and FY19 guidance.

While CCZ maintained FY18 results were “broadly in line with our expectations” the FY18 dividend of 4.5c per share fully-franked came in below its 4.75c per share forecast – reflecting lower than expected annuity income earnings.

Lifestyle’s results showed it delivered 321 new home settlements in FY18 – above the 278 achieved in 2017 – with underlying NPAT of $33.8 million up 35% from the previous corresponding period.

For CCZ, FY19 settlements guidances also did not surprise, with Lifestyle forecast new home settlements within the range of 310 – 350 with a strategic target of acquiring one or two new greenfield development land sites each year.

CCZ revised down its FY19-FY20 underlying NPAT forecast by -3% each year with its FY19 dividend forecast also revised down from 6.75c per share to 6.00c per share to reflect lower annuity earnings on cycling FY18 actuals.

Lifestyle comes up against Gateway Lifestyle Group (ASX: GTY) in the competitive retirement community space, with big gun Lendlease Group (ASX: LLC) also a formidable player in the sector.

LiveHire Ltd (ASX: LVH)

APP Securities has placed a sell on small-cap cloud-based human resources productivity platform company LiveHire Ltd.

While only an emerging player in the space, LiveHire has attracted some attention of late given its representation in the burgeoning cloud-services niche.

But APP names slow growth and a recent data breach as reasons to dump the speculative player from your portfolio despite LiveHire reporting its FY18 cash receipts were up 116% on FY17 with a cash balance at $30.6 million at the end of June with no debt.

APP concedes the company’s sales pipeline looks “healthy and growing” however there was a “distinct slow-down” in the velocity of deals being signed.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Citadel Group Ltd. The Motley Fool Australia has recommended Integrated Research 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.

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