Brokers slapped these 3 ASX stocks with a sell recommendation

The bulls may be in charge of the market but these three ASX stocks have found themselves on brokers' "naughty list".

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Nothing can keep the bulls down! Despite a weak start to the trading day, the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index has managed to claw back from the red to finish at a fresh 11-year high.

The top 200 stock benchmark finished just a tat above breakeven on Friday with the Saracen Mineral Holdings Limited (ASX: SAR) share price and Nearmap Ltd (ASX: NEA) share price leading the charge.

But the cheer isn't felt by all stocks and three in particular have become the latest to fall under a "sell" rating by brokers.

Perpetual on the "naughty list"

The first is the Perpetual Limited (ASX: PPT) share price, which tumbled 3.1% to $40.97 in the closing minutes of trade after Bell Potter downgraded the stock to "sell" from "hold" after the fund manager posted its March quarterly update.

"PPT experienced its worst quarterly net-flows in Perpetual Investments since calendar 2011 at -$1.9 billion. We have estimates for continued outflows at around -$300m a quarter for the foreseeable future," said Bell Potter.

"We believe the risk to our revised Sell recommendation is that PPT utilises its acquisition currency and relatively high PE to build scale in its business via a bolt-on acquisition. This is something the CEO flagged as a possible outcome at the recent February 1H19 result release."

Bell Potter has a 12-month price target of $35.17 on the stock.

Down a hole

Meanwhile, Morgan Stanley has reiterated its "underweight" recommendation on the Northern Star Resources Ltd (ASX: NSR) share price after the gold miner issued its latest quarterly production report.

The broker said that the quarterly update was weak on both the production and costs fronts with the miner's problematic Pogo mine continuing to give grief.

Northern Star produced 186,000 ounces of gold, which was below Morgan Stanley's forecast of 226,000 ounces.

"YTD [year-to-date] run rate of 783koz, well below guidance 850-900koz, MSe 853koz. The big miss was at Pogo with 33koz produced (MSe 69koz, DecQ 50koz)," said the broker, which as a $6.60 price target on the stock.

Sinking like cement

Another stock that's in the bad books is the Wagners Holding Company Ltd (ASX: WGN) share price. Wilsons continues to rate the stock a "sell" after the building materials company issued a profit warning as it fights a legal battle with Boral Limited (ASX: BLD).

"Wagners downgraded its FY19e EBIT guidance range 27.4% ($10.0m) to $25-28m, following its inability to resolve the Cement Supply Agreement with Boral, its largest cement customer," said the broker.

Motley Fool contributor Brendon Lau owns shares of Boral Limited. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. 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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