Are you wanting to buy ASX shares today but are unsure where to look? Below are two ASX shares I would consider placing $5000 in for the next 3–5 years.

Medical Developments International Ltd (ASX: MVP)

Familiarity is a great place to start when looking at what shares to buy. On the other hand, investing in an esoteric business can make you feel disconnected from the company. This can easily lead to a panic sale from a bump in the road. While Medical Developments may not be a household name, there’s a chance you’ve either used or heard of its products.

Medical Developments’ flagship product is the ‘green whistle’. Less commonly known as the drug Penthrox. Penthrox has been reining superior over other pain relief drugs as it’s fast-acting, non-addictive and self-administered. Its growth has, therefore, exploded in Australia and overseas, being used by paramedics, medical practitioner the defence force and more.

Medical Developments announced that it expects any negative impact caused by COVID-19 to be limited. In the last month alone it announced the approval for the sale of Penthrox in Thailand, Netherlands, Bosnia-Herzegovina and Hungary.

The list of countries where Penthrox is sold is growing fast, while sales are continuing to grow strongly in its first market, Australia. However, Penthorx only accounts for a little over half its revenue with the remaining coming from its medical devices segment. This segment accounts for medical devices including Space Chambers, masks and Breath-Alert Peak-Flow meters. These are also growing strongly in Australia with 1H20 up by approximately 45% compared to the prior corresponding period.

Its share price has rebounded strongly over the past two months following the market low at the end of March. However, it still has some 39% to go to reach its share price high prior to the market crash.

Aristocrat Leisure Limited (ASX: ALL)

Aristocrat Leisure is a gaming technology company which operates in over 90 countries. Its land-based business serving a range of products including electronic gaming machines and casino management systems saw revenue fall 6% in its recent half-year results. However, its digital portfolio which offers a range of apps is still growing strongly and was up 19% for the 6 months to 31 March 2020.

Aristocrat’s shares are trading at just over half of what they were in February. This is after another fall following the release of results which were short of consensus expectations. However, North America and New Zealand venues plan to open again through a phased approach in May and June while the larger Australian states look to re-open in July.

The steady re-opening will see its land-based businesses begin to return to somewhat normal. Although, there’s no knowing how long this may take. While this plays out, I believe Aristocrat’s digital business can continue to grow strongly, making this, in my eyes, a great time to buy shares and open a position in the company.

More reading

• Why didn’t Warren Buffett buy more shares in the recent bear market?
• Top brokers name 3 ASX shares to buy next week
• Here’s how I would put $10,000 to work on the ASX
• Top brokers are urging you to buy this slumping ASX 200 stock next week
• Brokers name 3 ASX 200 shares to buy right now

Michael Tonon owns shares of Medical Developments International Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Medical Developments International Limited. The Motley Fool Australia has recommended Medical Developments International Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX 200 shares:

Afterpay Ltd (ASX: APT)

According to a note out of UBS, its analysts have retained their sell rating but lifted their price target on this payments company’s shares slightly to a lowly $14.00. The broker made the revision to its price target after factoring in Afterpay’s recent U.S. update this month. While it acknowledges that the pandemic could accelerate positive structural changes for Afterpay, it has warned investors not to extrapolate the magnitude of recent growth in online sales. The Afterpay share price broke through the $50.00 mark earlier today.

Vicinity Centres (ASX: VCX)

Analysts at Morgan Stanley have retained their underweight rating and $1.25 price target on this shopping centre operator’s shares. According to the note, the broker believes that Vicinity will experience a material drop in rent rates once the crisis is over. And while it believes Vicinity has some high quality assets, there are other assets in its portfolio which it is less enamoured with and fears could struggle. The Vicinity share price is trading at $1.67 this afternoon.

Wesfarmers Ltd (ASX: WES)

A note out of Citi reveals that its analysts have retained their sell rating but lifted the price target on this conglomerate’s shares to $36.60. The broker was pleased to see the company take action on its underperforming Target business. And while it has lifted its earnings estimates for FY 2020 and the coming years to reflect stronger than expected sales growth, it still has issues with its current valuation. As a result, it appears to see better value elsewhere and has retained its sell rating. The Wesfarmers share price is fetching $40.27 on Tuesday.

More reading

• 4 reasons the Afterpay share price just hit $50
• The ASX 200 just hit an 11-week high. Here are 3 reasons we might be in overvalued territory
• What ASX investors can do before 30 June to save tax
• The ASX 200 stocks in the tax-loss selling firing line
• 2 unbelievable ASX 200 value shares to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Leading brokers name 3 ASX 200 shares to sell today appeared first on Motley Fool Australia.

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Yesterday, the S&P/ASX 200 Index (ASX: XJO) hit its highest closing level since 11 March at 5,615.6 points after a healthy 2.16% gain for the day. Today, the ASX 200 is pushing even higher – up another 1.41% at the time of writing to 5,694.7 points.

The ASX blue chips that have the heaviest weighting in the ASX 200 are behind this surge. The big 4 ASX banks (with the exception of Commonwealth Bank of Australia (ASX: CBA)) were all up over 2% yesterday and another 1% this morning. Telstra Corporation Ltd (ASX: TLS), Woolworths Group Ltd (ASX: WOW) and Wesfarmers Ltd (ASX: WES) are powering ahead today as well.

Afterpay Ltd (ASX: APT) is also contributing, making a new all-time high this morning of over $50 per share.

So what’s next for the ASX 200? Onwards and upwards?

On the contrary, here are 3 reasons I think the ASX 200 is getting into overvalued territory at these levels

1) US markets are wagging the ASX 200 dog

‘If America sneezes, the world catches a cold’ is how the old saying goes. As much as we would like to think otherwise, what happens in the United States pretty much dictates what happens on the ASX 200. And over in the US, the Federal Reserve is pumping a mind-boggling amount of cash into the financial system.

Here’s something to ponder: The US S&P 500 Index is only down 9.28% year to date. Really? Is the coronavirus pandemic and accompanying economic destruction only worth 9.28% in 2020?

Something strange is happening to the US markets (in my very humble opinion) and it has a lot to do with the massive Fed interventions.

This artificial inflation of the share market over there is spilling into the ASX in my view.

2) The markets are dislocating from reality

As a consequence of interest rates being a cut above zero, I think the markets have become distorted. There are no other options left for investors these days. Bonds, term deposits and other debt instruments have lost their potency as investments, which means a large section of the investing community is being pushed into ASX 200 shares.

This strong buying pressure is drawing attention away from the fact that corporate earnings are going to be hit hard in 2020 and possibly further into the future. We have entire businesses like Qantas Airways Limited (ASX: QAN) and Webjet Limited (ASX: WEB) in the deep freezer, commercially speaking.

Is this reflected in the current market? Not in my opinion. On the contrary, ASX travel shares like Qantas and Webjet are among today’s biggest gainers. Go figure.

3) FOMO has taken over the ASX 200

Investing greats like Warren Buffett and Benjamin Graham have said that the market is driven by 2 emotions: fear and greed. We saw a lot of fear in the ASX 200 back in March, and I think the current rally is being emotionally driven by greed. Once a market starts putting runs on the board, it attracts investors who might have ’gone to cash’ and are waiting to jump back in on fear of missing out (FOMO). This effect then snowballs as markets are pushed even higher.

It doesn’t matter what fundamentals actually underpin the markets in this type of situation, it slowly becomes a game of musical chairs. It can go on for a while, but eventually, the music stops. It’s hard to know whether this is happening, but it sure is starting to feel like it for this writer.

Foolish takeaway

I’m not trying to elicit panic here and I enjoy watching the value of my ASX 200 shares rise as much as the next investor. However, I like to ‘hope for the best, but prepare for the worst’ with my investing, and I see a lot of reasons why this market might be becoming overvalued.

The solution? Well, I’m not one to try and time the markets, but I am getting as much cash together as possible. That way, I always have one foot in both camps.

More reading

• What ASX investors can do before 30 June to save tax
• The ASX 200 stocks in the tax-loss selling firing line
• 2 unbelievable ASX 200 value shares to buy today
• Why didn’t Warren Buffett buy more shares in the recent bear market?
• ASX 200 up 1.8%: Big four banks jump higher, Flight Centre and Webjet rocket again

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited and Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO, Wesfarmers Limited, and Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post The ASX 200 just hit an 11-week high. Here are 3 reasons we might be in overvalued territory appeared first on Motley Fool Australia.

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