On Wednesday I looked at three shares that had found favour with brokers and been given the coveted buy rating.
Not all shares are in favour, though. Three that have fallen out of favour and been given the unwanted sell rating are listed below.
Here's why brokers think you should avoid them:
Ainsworth Game Technology Limited (ASX: AGI)
According to a note out of UBS, it has retained its sell rating and cut the price target on the game technology company's shares to $1.02 following the release of its full year results late yesterday. Although Ainsworth Game Technology's results were in line with its expectations, the broker hasn't seen anything in them to warrant a change in recommendation. Due to their heavy decline this year and the low multiples they trade, I wouldn't be a seller of its shares if I owned them. However, I still believe that there are better options in the industry for investors to choose from.
Bega Cheese Ltd (ASX: BGA)
A note out of Morgans reveals that its analysts have downgraded this food company's shares to a reduce rating with an improved price target of $7.00. While its full year results were in line with its guidance, the broker wasn't overly pleased with the lack of colour around its outlook. In addition to this, the broker suspects that an equity raising may be on the horizon after its acquisition of the Koroit facility from Saputo. I would have to agree with Morgans on this one and think its shares are a little on the expensive side right now.
Metcash Limited (ASX: MTS)
Analysts at Credit Suisse have retained their underperform rating and $2.51 price target on this wholesale distributor's shares following its annual general meeting yesterday. The broker wasn't surprised with management's trading update and saw little reason to adjust its recommendation. Credit Suisse's analysts aren't overly bullish on FY 2019 and feel a flat result would be a positive. I agree with Credit Suisse and intend to stay clear of Metcash for the time being.
