Top brokers name 3 shares to sell today

The City thinks you should be selling these shares without delay.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

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.

sdf

Top City brokers are always publishing research reports on the stocks they like and hate the most. The majority of this research isn’t available for the average investor. So, to help you make informed investment decisions, I’ve done a deep dive into analysts’ research to find the stocks the City believes you should be selling, or avoiding, today.

Overvalued

Back at the beginning of 2018, Shore Capital was advising clients to buy Barratt Developments (LSE: BDEV). However, in the middle of last week, the broker decided to reverse its decision and downgraded the stock from ‘buy’ to ‘sell’.

This is a big move and it seems to be based on the company’s growth prospects. Shore downgraded the stock after the homebuilder published its results for the year ended 30 July.

Should you invest £1,000 in Antofagasta Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Antofagasta Plc made the list?

See the 6 stocks

While the number of properties sold increased 1.6% year-on-year, management warned the number of homes sold by Barratt would come in below expectations in the current financial year. They’d promised growth of 5%, but this is now expected to be just 3%.

The lack of growth is disappointing considering the stock’s valuation. As Peel Hunt noted after the publication of the results, Barratt is now trading at a price to net asset value of 1.45 for 2020, slightly above the sector average of 1.35. Although a dividend yield of 7.4% for 2019 does sweeten the appeal.

Sector laggard

Meanwhile, Deutsche Bank is a seller of Berkeley (LSE: BKG). The investment bank believes the company is worth just 3,428p, around 11% below the current share price. Interestingly, analysts at the German bank are overwhelmingly positive on the home building sector in general. They believe “another powerful wave” of government support could be on the cards as politicians try and win over voters.

Still, Berkeley seems to be out of favour because of its valuation. Analysts are expecting earnings per share to decline by around 29% this year. Even after factoring in this decline, the stock is trading as a forward P/E of 11.6, a premium of 30% to the broader homebuilding sector average. The company’s dividend yield of 5.2% is also below average.

Berkeley’s price to net asset value ratio sits at 1.65, which makes it even more expensive than Barratt on this metric. Looking at these figures, it’s clear why analysts at Deutsche Bank believe Berkeley is overvalued at current levels

Risky investment

Analysts at Deutsche Bank also downgraded their outlook for mining group Antofagasta (LSE: ANTO) last week. After awarding the company a ‘hold’ rating and 930p and price target back in April, analysts have now downgraded Antofagasta to ‘sell’.

This appears to be another valuation call. Over the past 12 months, the outlook for the mining group has steadily deteriorated and analysts across the City have downgraded their prospects for the business. This time last year, analysts were expecting Antofagasta to earn $0.91 per share for full-year 2019. Now they’re forecasting just $0.62, a 29% year-on-year decline.

As analyst as expectations have deteriorated, the share price has remained constant. As a result, its shares are now dealing at a forward P/E of 16, making the company by far the most expensive in the mining sector. The rest of the industry is dealing as a forward P/E of just 8.

Looking at this evaluation, it’s clear to me why analysts think now could be an excellent time to move away from the stock.

Should you buy Antofagasta Plc now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Businessman using pen drawing line for increasing arrow from 2024 to 2025
Investing Articles

This FTSE 100 dividend gem now yields a stunning 8.6% a year, so should I buy more?

This very-high-yielding FTSE 100 financial services titan can generate huge dividend income over time, especially if the power of dividend…

Read more »

British Pennies on a Pound Note
Investing Articles

£10,000 invested in this red-hot penny share 5 months ago would now be worth…

One penny share that has more than doubled in a few months has caught our writer's eye. But will he…

Read more »

Side of boat fuelled by gas to liquids, advertising Shell GTL Fuel
Investing Articles

Is Shell’s share price a bargain after a 9% fall?

Shell’s share price is down, leaving the stock looking even more undervalued to me, especially given its strong earnings growth…

Read more »

Investing Articles

Over the next 10 years, this area of the stock market could be a gold mine

Edward Sheldon is building his portfolio around this area of the stock market as he believes it’s going to deliver…

Read more »

Closeup of "interest rates" text in a newspaper
Investing Articles

Should I lock in a 5.38% yield for 30 years of passive income?

With UK government bonds offering higher yields than the FTSE 100, should investors look beyond the stock market for passive…

Read more »

Young woman carrying bottle of Energise Sport to the gym
Investing Articles

Here are my 3 top-performing FTSE shares in June

Mark Hartley highlights his three best-performing FTSE shares from last month and takes a closer look at a particularly interesting…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Greggs shares slump again, but could go on a (sausage) roll

After sales growth fell during the heatwave, Greggs shares were battered. But I suspect the bad news is fully baked…

Read more »

Tesla car at super charger station
Investing Articles

Will the Tesla share price go up or down? It’s pure speculation

The Tesla share price is simply disconnected from the fundamental principles for valuing a stock. Dr James Fox explains.

Read more »