Earlier in the week I had a look at a few shares which brokers had recently given buy ratings to.
Today I thought I would look at the shares they think investors should be selling. Here are three that caught my eye:
Netwealth Group Ltd (ASX: NWL)
According to a note out of UBS, it has retained its sell rating and $5.55 price target on the fintech company's shares. Although Netwealth's first-half results came in slightly ahead of expectations and the company increased its full-year earnings guidance, it wasn't enough to make UBS change its rating. The broker appears to believe that the market has got a little ahead of itself and its shares are overvalued. UBS' analysts make a good point. Based on its estimates for FY 2018, Netwealth's shares are changing hands at approximately 57x forward earnings.
Retail Food Group Limited (ASX: RFG)
Another note out of UBS reveals that its analysts have downgraded the embattled food and beverage company's shares to a sell rating from neutral. The broker has also reduced the price target on Retail Food Group's shares all the way down to 90 cents from $2.15. According to the note, the company's half-year results were weaker than it expected and the broker has concerns that its new banking covenants will be difficult to comply with. I would have to agree with UBS on this one. I think the outlook for Retail Food Group is rather bleak.
SEEK Limited (ASX: SEK)
Analysts at Citi have retained their sell rating and lifted the price target on the job listings company's shares slightly to $15.10. According to the note, despite its investment in Asia, the broker believes that the Australian business remains the driver of its earnings growth. Which is a concern considering its prediction that Australian job ads may be close to reaching their peak. While I wouldn't be a seller of SEEK's shares, I wouldn't necessarily be a buyer of its shares unless they came down 10%-15% from here.
