4 ASX 200 shares to sell amid heady market activity: experts

The ASX 200 hit a new record high on the back of renewed hopes for a rate cut last week.

| More on:
Time to sell ASX 200 shares written on a clock.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Hub24 faces valuation risks with limited upside, prompting this recommendation to lock in gains after a strong performance.
  • Wesfarmers appears fully valued with a challenging P/E ratio amid soft retail sales and consumer sentiment, suggesting limited near-term growth.
  • SGH has a sell recommendation due to its high market valuation, while Viva Energy is facing business pressures.

The S&P/ASX 200 Index (ASX: XJO) smashed a new record high last Thursday at 9,109.7 points.

The market surge followed news that unemployment had risen to a four-year high of 4.5%, boosting hopes for another rate cut.

The gold rush also contributed to the market record, with the four biggest ASX 200 gold stocks closing the week at historical peaks.

Amid this heady market activity, experts warn that some ASX 200 shares have overshot their fundamental worth.

Here are four shares that have attracted sell ratings from top analysts.

4 ASX 200 shares to sell now: experts

Hub24 Ltd (ASX: HUB)

The Hub24 share price is $106.51 on Monday, surging 1.2%. Over the past 12 months, the stock has lifted 56%.

Jabin Hallihan from Family Financial Solutions says the investment platform provider has a strong record of performance.

However, he points out that the ASX 200 financial share has ripped from $56.75 on 7 April to $112.46 on 25 August.

Thus, he sees limited upside from here, commenting (courtesy The Bull):

We see limited upside, with valuation risk outweighing reward after the company set a high benchmark.

We recommend reducing exposure or locking in gains at current levels.

Wesfarmers Ltd (ASX: WES)

The Wesfarmers share price is $89.47, up 0.7% for the day and up 26% over the past 12 months.

Philippe Bui from Medallion Financial Group says the market's largest ASX 200 consumer discretionary share "looks fully valued after a strong multi-year run".

Bui comments:

Recently trading on a lofty price/earnings ratio of about 34 times and a modest dividend yield below 3 per cent, the stock commands a premium multiple that's difficult to justify given subdued retail sales, rising cost pressures and softer consumer sentiment.

The balance sheet remains strong, but near term growth catalysts are limited.

SGH Ltd (ASX: SGH)

The SGH share price is $48.33 today, up 0.3% for the day and up 12% over the past 12 months.

John Athanasiou from Red Leaf Securities points to SGH's strong share price run over the past two years.

The ASX 200 industrial share has lifted from $26.78 on 16 October 2023 to more than $48 apiece last week.

Athanasiou reckons it's time to take profits, commenting:

While operational execution is solid, the stock has traded up to a level where analysts see better opportunities elsewhere.

In our view, the company's high valuation presents an opportunity for investors to consider taking some profits.

Viva Energy Group Ltd (ASX: VEA)

The Viva Energy share price is $1.76, down 0.3% today and down 34% in the year to date.

On The Bull last week, Andrew Wielandt from DP Wealth Advisory explained his sell rating on the ASX 200 energy share.

Wielandt said:

The share price is under sustained pressure in response to weaker sales and lower than usual refining margins in the first half of fiscal year 2025.

A 27 per cent fall in tobacco sales, due to an increase in illicit sales, is also hurting the business.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 and Wesfarmers. The Motley Fool Australia has recommended Hub24 and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

Buy and sell on yellow paper with pins on them and several share price lines.
Broker Notes

Macquarie names 2 ASX All Ords stocks set to benefit and 1 likely to suffer following their upcoming AGMs

Macquarie expects very different market reactions following the upcoming AGMs for these ASX All Ords stocks.

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

A woman scratches her head in dismay as she looks at chaotic scene at a data centre
Broker Notes

Macquarie tips almost 90% upside for Xero shares

Xero is executing well on its strategy and should deliver exceptional returns, Macquarie says.

Read more »

A young man goes over his finances and investment portfolio at home.
Broker Notes

Should you buy Domino's, Orica, and Xero shares?

Morgans has given its verdict on these popular stocks.

Read more »

Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices.
Broker Notes

Leading broker names 1 ASX 200 share to buy and 1 to hold

Here's what the broker is saying about these shares.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

A businessman in a suit wears a medal around his neck and raises a fist in victory surrounded by two other businessmen in suits facing the other direction to him.
Broker Notes

Up 56% since April, why Macquarie expects this ASX 200 stock to keep outperforming

Macquarie forecasts another year of outperformance for this fast-rising ASX 200 dividend stock. Let’s see why.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »