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:

Costa Group Holdings Ltd (ASX: CGC)

According to a note out of the Macquarie equities desk, its analysts have retained their underperform rating but lifted the price target on this horticulture company’s shares to $2.87. The broker felt that Costa’s annual general meeting update last week was reasonably mixed. And while there were positives in respect to demand and pricing, it wasn’t enough to warrant a change in rating by the broker. The Costa share price is trading at $3.15 this afternoon.

Lovisa Holdings Ltd (ASX: LOV)

Analysts at Citi have downgraded this jewellery retailer’s shares to a sell rating and cut the price target on them to $5.85. According to the note, the broker believes the recovery in the Lovisa share price over the last couple of months has been overdone. Especially as it believes Lovisa could fall short of consensus earnings estimates over the medium term. This is due to changing consumer preferences, lower shopping centre traffic, and a slowdown in its store network expansion. Lovisa shares are changing hands at $7.80 on Tuesday.

Vicinity Centres (ASX: VCX)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $1.25 price target on this shopping centre operator’s shares. This follows the company’s announcement of a $1.2 billion placement and the cancellation of its final dividend. Outside this, it fears that Vicinity’s rent rates will fall heavily due to the pandemic and weigh on its income. The Vicinity share price is trading at $1.55 this afternoon.

More reading

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• ASX 200 down 0.1%: Big four banks drag ASX lower ahead of RBA meeting
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• ASX 200 down 1.2%: Westpac tumbles, Appen reaffirms guidance, Costa CEO to retire
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. 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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The Bionomics Ltd (ASX: BNO) share price is charging higher today, up 16.67% at the time of writing on the back of a subscription agreement announcement.

Bionomics is a clinical-stage biopharmaceutical company that develops treatments for central nervous system disorders, such as anxiety, depression and Alzheimer’s disease.

Bionomics has a portfolio of drug candidates from early to mid stages of clinical development. This portfolio is fed by the company’s proprietary technology platforms for each step in the drug discovery and development process.

Before we dig into the announcement, it’s important to note that we’re very much at the smaller end of the ASX here. Bionomics shares are currently changing hands at 5.6 cents per share, taking market capitalisation to around $30 million.

Why the Bionomics share price is jumping higher today

This morning, Bionomics announced it has entered into a subscription agreement with Apeiron Investment Group to recapitalise the company and assist in securing further equity capital.

Over the last few years, Apeiron has made investments in several European and US-based biotech companies, with a particular focus on the development of novel treatments for various mental health disorders.

Under the subscription agreement, Apeiron agrees to subscribe or procure subscriptions of 135.83 million shares at an issue price of 4 cents per share – raising $5.43 million. This is to proceed in 2 tranches of 81.5 million shares and 54.33 million shares, with the second tranche being subject to shareholder approval.

On top of this, Apeiron also agrees to underwrite further capital raisings by Bionomics within a 15-month period from an extraordinary general meeting of shareholders (EGM) to be convened. This will have the effect that Bionomics will raise up to $15 million at a minimum issue price of 6 cents per share – subject to approvals from shareholders and the Foreign Investment Review Board (FIRB).

What does this mean?

Overall, if shareholder and FIRB approvals are received, Bionomics expects to raise between $20.4 million and $22 million. This would ensure that the company has significant funds to progress phase 2 clinical trials for its lead compound, BNC210, for the treatment of PTSD and other anxiety and stress-related disorders.

In November 2019, BNC210 received Fast Track Designation from the US Food and Drug Administration (FDA) for the treatment of PTSD.

The recapitalisation will commence with the issue within Bionomics’ existing placement capacity of 81.5 million shares – the first tranche raising $3.26 million. Following completion, Apeiron will own approximately 13% of Bionomics and will be invited to nominate a director to the board.

After this, Bionomics will then call an EGM seeking approval to place a further 54.33 million shares – the second tranche raising $2.17 million. If this proceeds, Apeiron will own approximately 19.9% of Bionomics and will be invited to nominate a second director to the board.

As part of the subscription process with Apeiron, after the completion of the second tranche, an entitlement offer will be launched for eligible shareholders to purchase up to 54.33 million shares at 4 cents per share – the same price as the Apeiron subscriptions across the 2 tranches.

Commenting on today’s update, Bionomics chair Dr Errol De Souza said:

“We are pleased to have secured the support of a world-class and like-minded life science investor of the quality of Apeiron . . . The funding will ensure that we can initiate our second Phase 2b clinical trial in PTSD, which the Board believes will provide shareholders the best prospects to realise value in the Company.”

More reading

• 3 investing secrets for success with ASX shares
• Is the a2 Milk share price too high to buy?
• Leading brokers name 3 ASX shares to sell today
• ASX 200 investor in your 40s? 3 shares to buy now
• Why Evolution, Iress, Pro Medicus, & Vicinity shares are dropping lower

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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S&P/ASX 200 Index (ASX: XJO) investors in their 40s still have 15–25 years until retirement. Investors in this demographic are generally at the peak of their income-earning potential. This should allow them to invest significant amounts of capital into the share market, with plenty of time to generate compounding returns.

ASX 200 investors in their 40s

As investors, we’re a motley crew. We all have motley goals, motley resources and motley risk appetite. Because of this, it is important to understand your own personal circumstances and invest accordingly. The below ASX shares will be fantastic options for most investors in their 40s, but not for all. 

With so much time left until retirement, growth shares are still a fantastic option for investors in their 40s.

3 best ASX 200 shares to buy now

Nanosonics Ltd (ASX: NAN)

Nanosonics employs a razor and blade business model that I am a huge fan of. The company sells its Trophon disinfection machines at near cost price but then sells high margin consumables to the installed base of users. This provides amazing economics for a business that can grow its installed base.

Nanosonics has said their Q4 and thus FY20 installed base growth may be impacted by direct access to hospitals. Prior to this, their global installed base grew 17% in the last 12 months and 8% in the last 6 months. 

Magellan Financial Group Ltd (ASX: MFG)

Magellan has been an incredible investment since it was founded in 2006 by Hamish Douglass and Chris Mackay. Over the last 15 years, the Magellan share price has provided total returns of nearly 35% per annum.

Magellan offers two market-leading strategies, global equities and global listed infrastructure. The business has multiple funds on offer on the ASX and earns revenue through management fees and the like.

The share price is currently down 21% from its 14 February highs.

Resmed Inc (ASX: RMD)

Resmed is one of the few businesses to have benefited from the coronavirus pandemic, but that doesn’t mean it isn’t a great buy for the long term. 

The medical device company has a large total addressable market, with a focus on sleep apnea. Sleep apnea is majorly under-diagnosed, meaning education is important. As more people become aware of the condition, Resmed could grab market share in a growing market thanks to its high-quality products.

Further to this, the company has more recently looked at data and analysis as growth drivers. The share price is currently 10% below its 20 February highs, presenting a nice long term entry point.

Foolish bottom line

It’s worth noting that I own two of these ASX 200 shares, despite being in my mid-20s. Why? Because they are high-quality businesses with a proven track record over the long term.

More reading

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• Is the NAB share price cheap today?
• The big oil price recovery and bounce in ASX oil stocks are bringing out the bears
• 2 ASX 200 shares to watch on Tuesday

Lloyd Prout owns shares of Nanosonics Limited and Resmed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited and ResMed Inc. 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 Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited and ResMed Inc. 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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