Knowing which ASX 200 shares to avoid can be just as important as knowing which ones to buy.
With that in mind, let's take a look at three popular ASX 200 shares that experts are tipping as sells, courtesy of The Bull. Here's what they are saying:
Image source: Getty Images
PLS Group Ltd (ASX: PLS)
Bell Potter has named PLS Group, formerly known as Pilbara Minerals, as an ASX 200 share to sell.
While it is a fan of the lithium miner, it believes that its recent share price rally has taken it into dangerous territory. Especially if lithium prices don't rebound as quickly as some expect. It said:
Formerly Pilbara Minerals, this lithium miner's operational performance remains sound. Despite a strong balance sheet and long term tailwinds from electric vehicles and energy storage, lithium supplies exceed demand in the short term and overshadow any catalysts. The recent share price rally has run stronger than most sharemarket experts expected, with the stock still pricing in a cyclical rebound. Downside risk remains if lithium prices stay lower for longer.
QBE Insurance Group Ltd (ASX: QBE)
Bell Potter has also named insurance giant QBE as an ASX 200 share to sell.
It is feeling cautious about the company's outlook given how premium growth is moderating and claim costs are rising. The broker explains:
This insurance giant has recently delivered a strong performance, which included solid returns on equity and a disciplined underwriting approach. However, forward looking conditions appear more mixed. Premium growth is moderating, and rising claims costs in a higher inflation environment may start to erode margins. Also, in our view, the stock's re-rating during the past year potentially limits upside. Most of the good news has been priced into the stock, so investors may want to consider cashing in some gains.
Suncorp Group Ltd (ASX: SUN)
Finally, another insurer that has been named as a sell is Suncorp.
Shaw & Partners is feeling bearish due to its insurance risk exposure. And while its shares have pulled back recently, it thinks investors should continue to keep their powder dry. The broker said:
The insurer announced it had received more than 10,000 claims by November 26 in response to recent severe storms in New South Wales and Queensland. The net cost to Suncorp is expected to be about $350 million, according to earlier terms of assessment. About 5000 claims related to motor damage and a further 5000 claims involved homes. Frequent buy-back updates don't offset insurance risk exposure. The shares have fallen from $21.82 on August 22 to trade at $17.505 on December 18.
