On Wednesday 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 them:

Amcor PLC (ASX: AMC)

According to a note out of Goldman Sachs, its analysts have retained their sell rating but lifted their price target on this packaging company’s shares to $12.50. Amcor delivered stronger than expected earnings growth in the third quarter. Its EBIT increased 10% compared to Goldman’s 7% forecast. However, it remains sell rated on valuation grounds. It notes that Amcor is trading at a notable premium to other packaging companies under its coverage. Amcor’s shares are changing hands for $14.10 this afternoon.

Commonwealth Bank of Australia (ASX: CBA)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and cut the price target on this banking giant’s shares to $56.00. According to the note, following the release of its third quarter update, the broker sees little reason that Commonwealth Bank’s shares should trade at a premium to its peers. In addition to this, it has forecast a sizeable dividend cut in August and has concerns over margin pressures. The Commonwealth Bank share price is down almost 3% to $59.16 this afternoon.

Sigma Healthcare Ltd (ASX: SIG)

Analysts at UBS have retained their sell rating and 53 cents price target on this pharmacy chain operator and distributor’s shares following its trading update. Although Sigma reported strong sales growth in March because of the pandemic, it notes that management has decided against providing guidance for FY 2021 at this stage. So, with its shares trading at approximately 20x estimated forward earnings, UBS sees no reason to change its rating at this point. The Sigma share price is trading at 57.5 cents this afternoon.

More reading

• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• What happens to ASX shares if Australian house prices do fall 30%?
• Is the CBA share price a buy?
• Negative interest rates coming? Here’s what it would mean for ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor 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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Exchange-traded funds (ETFs) can be really good choices for easy investing and good returns.

It’s a lot easier to invest in exchange traded funds than identifying individual shares to buy. To outperform the share market you need to put in a lot of time to research the potential investments, think about how much it can grow, consider the balance sheet strength and so on.

Investing in an ETF needs less analysis. If you set up a regular investment plan then you don’t need to really think about much at all. Yet you still get access to the strong long-term returns. Some have very low annual management fees.

Option 1: Vanguard FTSE Asia ex Japan Shares Index ETF (ASX: VAE)

This is an ETF focused on the Asian share market. Predominately it’s invested in businesses located in China, Taiwan, South Korean, Hong Kong and India.

Before the coronavirus came along, Asian economies were growing at an attractive pace. Middle class wealth was rising quickly and eCommerce was growing strongly. I think that some Asian businesses are among the best in the world.

Among the top 10 holdings are: Alibaba, Tencent, Taiwan Semiconductor Manufacturing, Samsung and Ping An Insurance.

The ETF has a relatively low management fee of just 0.40% per annum, which is much cheaper than most Asian-focused Australian fund managers.

I think the returns of 8.9% per annum have been solid since inception in December 2015 (which includes the current decline).

It has over 1,200 holdings, a dividend yield of 3%, a p/e ratio of 12.3x and a return on equity (ROE) of 14.75%.  

Option 2: Betashares FTSE 100 ETF (ASX: F100)

The UK share market has been pummelled just like most other markets. With this investment you can get exposure to 100 of the biggest businesses listed on the London Stock Exchange.

One of the benefits of the UK share market is that the ETF’s top 10 holdings of the FTSE are in industries that are holding up quite well. There’s pharmaceuticals (Astrazeneca and GlaxoSmithKline), alcohol (Diageo) and consumer products (Unilever and Reckitt Benckiser).

Within the next group of 20 shares are shares like mining (Rio Tinto and BHP), electricity distribution (National Grid), a telco (Vodafone) and a supermarket (Tesco).

I think the UK share market is pretty defensive with a solid dividend yield. At the end of April this BetaShares offering had a trailing dividend yield of almost 6%, though this will probably reduce somewhat.

BetaShares charges an annual management fee of 0.45% per annum.

Foolish takeaway

Both of these ETFs look cheap today and have quality holdings that could be good for many years ahead. I’d probably prefer buying the UK ETF because of the defensive shares and high dividend yield, but getting exposure to Alibaba and Tencent sounds good to me too.

More reading

• 2 quality ETFs I’d buy today

Motley Fool contributor Tristan Harrison 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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The Kogan.com Ltd (ASX: KGN) share price has been experiencing a very strong rally. After dropping as low as $3.45 in mid-March, Kogan shares are now trading at $8.75, a massive 153.6% increase. In comparison, the S&P/ASX 200 Index (ASX: XJO) has seen a much more modest increase during this period.

So, is it too late for investors to take a stake in Australia’s largest locally-based, online specialist retailer?

Strong March quarter and record customer growth in April

Kogan released a trading update in April indicating that it saw a very strong 30% increase in gross sales and a 23% jump in gross profit during the March quarter. The final month of March saw particularly strong growth, with sales increasing by more than 50% on the prior corresponding period (pcp). The company also experienced its largest-ever monthly increase in active customers since its IPO.

Kogan revealed that it was able to successfully navigate through the disruptions caused by the coronavirus in all of its key markets.

Due to the harsh lockdown restrictions, there has been a surge in online spending at specialist retail sites such as Kogan and Amazon. In particular, Kogan has seen a strong rise in the sales of home office equipment, such as PCs and laptops, as well as home fitness equipment.

This ramp-up in sales accelerated further in the month of April, with sales growing by more than 100% in April compared to the pcp.

Profits during April were even more impressive, with gross profit growing by more than 150% and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increasing by more than 200%. This boost in sales during April meant that Kogan’s adjusted EBITDA was up by a very impressive 40% financial year to date compared to the same period last financial year.

This strong result was achieved despite the company heavily investing to build its brand, with overall operating costs increasing by 37% during the March quarter. 

Kogan continues to invest in its proprietary marketplace platform. It revealed that its pipeline for new sellers in the Kogan Marketplace remains strong and continues to grow despite its rapid onboarding of new sellers.

Is it too late to invest in Kogan?

With Kogan’s recent share price rally, I don’t think it offers investors compelling value at present, but it is still worthy of consideration as a long-term buy and hold option.

Kogan remains well-placed to leverage the growing adoption of online shopping, the increasing popularity of its Kogan-branded products and in particular, its fast-growing Kogan Marketplace.

Additionally, the company’s expansion into a broad range of verticals, including internet, mobile, energy, credit cards, super, travel, insurance and cars, provides it with a diversified business model and a wide range of future growth opportunities.

More reading

• Why I’d buy and hold Telstra shares for a decade
• How to invest $1,000 like Warren Buffett today
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Should you cash out of this ASX 200 rally?
• This ASX 200 share is rocketing higher after delivering more strong sales growth

Motley Fool contributor Phil Harpur owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. 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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