Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Afterpay Ltd (ASX: APT)

According to a note out of UBS, its analysts have retained their sell rating and lowly price target of $13.00 on this payments company’s shares. The broker has held firm with its rating despite news that Tencent Holdings has snapped up a 5% stake in the buy now pay later provider. While it acknowledges that this validates the Afterpay business model, it feels it is unlikely that Tencent will give Afterpay access to WeChat payments in the China market. In light of this, it sees no reason to change its rating at this point. The Afterpay share price ended the week at $39.88.

AGL Energy Limited (ASX: AGL)

A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and cut the price target on this energy retailer’s shares to $15.88. According to the note, the broker expects AGL Energy to be hit with a double whammy of weak commodity prices and financial relief for customers. And while it has retained its guidance for FY 2020, the broker expects next year to be much more challenging. The AGL Energy share price last traded at $16.49.

SEEK Limited (ASX: SEK)

Analysts at Morgans have downgraded this job listings company’s shares to a reduce rating with a $15.55 price target. According to the note, the broker was surprised to see SEEK’s share price rally so hard over the last few weeks considering the tough trading conditions it is facing. It isn’t expecting a rebound in job advertisements to happen quickly and expects it to be a slower recovery than the market appears to believe. The SEEK share price ended the week at $17.41.

More reading

• Top brokers name 3 ASX 200 shares to buy next week
• What to watch on the ASX 200 next week
• The ASX 200 blue chip shares I would buy with $5,000 after the market crash
• Top broker urging you to buy this ASX 200 retail stock next week
• Afterpay shares are up 400% in 6 weeks: Is it too late to invest?

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended SEEK 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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There aren’t many ASX shares that I think every investor should own.

Many businesses aren’t “great” businesses. For plenty of shares it’s hard to be quite certain about their long-term growth prospects. There’s a lot of change and disruption happening out there all the time due to competition and the ongoing coronavirus pandemic.

But there is a small group of shares that I could see weathering most problems, including the current issues. These shares have long-term growth prospects, great management and operate in reliable industries.

Here are two of my favourite ASX shares that I think every investor should own:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) 

I believe that Soul Patts is one of the best shares on the ASX. It’s an investment conglomerate that has been going for over a century. I think it could go for another hundred years because of its style of operations.

It’s invested in a variety of different shares in different industries like TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW), Clover Corporation Limited (ASX: CLV) and Palla Pharma Ltd (ASX: PAL). It also owns plenty of unlisted businesses outright like resources, agriculture and swimming schools.

It has been recently reported that it’s going to start investing in regional data centres alongside a business called Leading Edge Data Centres.

Soul Patts is diversified, it’s long-term focused and it has a growing dividend. There’s a lot to like and it’s one of those ASX share ideas you can own for a very long time.

Altium Limited (ASX: ALU) 

I believe that Altium is one of the best ASX growth shares around. It’s a world leader in providing electronic PCB software to help engineers design the devices, items and vehicles of the future.

It already has an impressive list of clients using its software including Amazon, Microsoft, Google, Disney, John Deere, Tesla, Space X, NASA and so on.

Over the past several years it has been steadily growing its profit margins thanks to its operating leverage and growing scale. That’s the advantage of a software business – once you’ve developed the software there aren’t many more costs, it mostly falls to the profit lines. That’s a sign of a great ASX share.

Altium has an ambitious goal of 100,000 Altium Designer subscribers and US$500 million revenue by 2025. These are large goals, particularly under the current circumstances. But its cloud offering of Altium 365 could be perfect to convince potential clients to switch over in this period of disruption.

The company’s balance sheet is great because it doesn’t have any debt and its cash balance is steadily growing despite paying (attractive) growing dividends each year. This growing cash pile can be used for bolt-on acquisitions or simply to ride out tougher times like this.

Altium’s share price has performed strongly since 23 March 2020. It’s not cheap, but it could be one of those long-term winners.

Foolish takeaway

I think both of these shares could be some of the best ASX shares out there.

At the current prices I’d go for Soul Patts. Altium may have recovered too strongly (in the short term) given the uncertain economic circumstances. However, with interest rates now at very low levels, both of these shares look very attractive compared to holding cash or even bonds.

More reading

• 3 ASX dividend shares raising dividends like clockwork
• 3 of the best ASX 200 shares to buy and hold for 10 years
• Why I’m even more confident about the Soul Patts share price
• How to make a $1 million share portfolio by investing $1,000 a month
• How to build your first ASX share portfolio

Tristan Harrison owns shares of Altium and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Altium. 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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Just ‘buying the index’ is often derided as the ‘easy way out’ or investing for those who don’t like to invest. After all, if you compare the ease of just buying a plain-Jane index fund instead of doing the research, finding ASX shares that you think are winners and buying at the right price, it indeed seems like the easy way out.

Normally, the goal of any ‘active’ investor is to outperform the broader market – the return you can get from just buying an index fund like the Vanguard Australian Shares Index ETF (ASX: VAS). If you can get a market return so easily, you might as well aim higher if you’re actually interested in investing, after all.

But according to reporting in the Australian Financial Review (AFR), the lazier you are as an investor, the more likely you are to get a better investment return.

According to the AFR report, the period of immense market volatility we saw over February and March saw a massive increase in retail investors buying and selling ASX shares – double that of the preceding 6 months.

Volatility breeds risky behaviour

The AFR quotes a study from ASIC (the Australian Securities and Investment Commission), which found that, during this period, more than half the days on which retail investors were net sellers, they watched the stock prices of investments rise the following day.

Yet if an index investor just ignored the markets during this time, they would have been up close to 20% from the lows we saw in March – without any brokerage fees, transaction costs or taxes that come from dipping in and out of shares to worry about.

This type of behaviour has been proven to bring wealth destruction time and time again. It’s the reason why Warren Buffett always says things like “if you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes”.

I’ll add another quote from Buffett’s right-hand man Charlie Munger, who once said: “I succeeded because I have a long attention span.”

Do you really think these 2 investing legends would be darting in and out of shares during a bear market? No! They both have made a habit of making big purchases of shares during times of volatility and then sitting on their buys for years and decades afterwards.

It’s something of a lazy approach, but as we’ve seen – the lazy investors usually end up on top. So even if you just ‘buy the index’, your chances of high returns are far greater than someone who thinks they can time the market!  

More reading

• How to invest $500 in ASX shares today
• 3 high quality ASX dividend shares to buy next week
• Why diversifying your ASX shares is so important
• Why invest in ASX ETFs?
• Does this ASX share have the safest dividend on the market?

Motley Fool contributor Sebastian Bowen 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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