Over the last 12 months, the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price has been among the best performers on the S&P/ASX 200 Index (ASX: XJO).

During this time, the pizza chain operator’s shares have rallied a sizeable 49% higher.

Why has the Domino’s share price smashed the market?

Investors have been buying the company’s shares over the last 12 months due to its strong performance during the pandemic.

For example, during FY 2020, Domino’s delivered a 12.8% increase in network sales and a 21.4% jump in online sales.

This was driven by strong same store sales growth and a 6.5% to increase in its store network to 2,668 stores. This comprised 78 new stores in Europe, 75 new stores in Japan, and 10 new stores across Australia and New Zealand.

This ultimately led to the company reporting a 7.3% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $303.0 million. This was despite the company providing $14.1 million to support stores through the height of the pandemic.

Can the Domino’s share price go higher?

The good news is that the Domino’s share price has been tipped to go higher from here by one leading broker.

According to a note out of Bell Potter, its analysts have just reiterated their buy rating and $99.30 price target on its shares.

This price target represents potential upside of 20% over the next 12 months excluding dividends.

With group year-to-date (first 17 weeks) same store sales up 8.4% on the prior corresponding period, the broker feels the company is well-placed to deliver another strong result in FY 2021. It is forecasting a 20% year on year increase in net profit to $174.9 million.

And looking further ahead, Bell Potter notes that management has plans to double its store network organically over the next decade or so to 5,550 stores. It also believes the company could accelerate its growth inorganically through acquisitions.

More reading

• Leading broker names the ASX retail shares to buy in 2021
• How the Domino’s Pizza (ASX: DMP) share price rocketed over 60% last year
• 2 outstanding ASX shares to buy and hold
• How does fiscal stimulus impact ASX share prices?
• Buy these ASX blue chip shares in 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Analysts at Bell Potter have been busy finding ASX shares from several industries that they believe are best placed to have a strong 2021.

On this occasion, I’m going to look at the resources sector. Here are a couple of shares they rate highly:

Nickel Mines Ltd (ASX: NIC)

Nickel Mines is one of the broker’s top picks. This is based on its shares being cheap relative to its peers, its aggressive growth profile, and its pure nickel commodity exposure. Nickel is one of Bell Potter’s preferred base metals.

The broker has a buy rating and $1.60 price target on the company’s shares.

It commented: “During 2020 NIC’s NPI production lines operated at steady state production levels and all-in costs that beat our original forecasts and nameplate capacity, resulting in production attributable to NIC of ~34ktpa. The strong operational performance and rising nickel price enabled NIC to repay debt early and declare a maiden A2cps dividend (unfranked).”

The broker has also been pleased with its agreement with its partner, Shanghai Decent Investment, to acquire a 70% equity interest in the Angel Nickel Project in Indonesia.

“We view this as a positive development. The acquisition has been de-risked by the strong performance of NIC’s existing operations and screens as excellent value on a number of metrics. It should lift attributable production by +25ktpa (~74%), commissioning October 2022,” it concluded.

Regis Resources Limited (ASX: RRL)

This gold miner is another resources share that Bell Potter rates highly. It currently has a buy rating and $5.72 price target on the company’s shares.

It views Regis Resources as an attractive, reliable gold producer and notes that it has achieved consistent operating margins and is investing smartly.

Bell Potter commented: “RRL’s FY20 EBITDA margin of 52% is competitive with, or ahead of, key industry peers. RRL’s ongoing CAPEX is, in our view, an investment into attractive, capital efficient growth options that leverage off RRL’s existing infrastructure – an aspect of its operations that set it apart from many peers.”

The broker believes the market is overlooking the potential of its McPhillamys Project in NSW, which has made good progress through the permitting process and is well placed to advance to production.

It feels this should deliver material production growth in the future and could commence construction during 2021.

“In our view, the market attributes little value to this asset. RRL also remains one of the sector leaders for shareholder returns. Its FY20 dividend equates to a payout of $41m and a payout ratio of 43% of NPAT for a 2.9% fully franked yield (at dividend declaration),” it concluded.

More reading

• 5 top ASX mining shares for dividends and growth in 2021
• Can these 2 outperforming ASX gold miners shine on through 2021?
• Why the Regis Resources (ASX:RRL) share price is pushing higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The ECS Botanics Holdings Ltd (ASX: ECS) share price is a top ASX performer today, up 16%. This follows news that the company plans to acquire Victoria-based medical cannabis cultivator, Murray Meds.

Located on the Murray River in North Western Victoria, Murray Meds operates a licenced medical cannabis cultivation and manufacturing facility. The company produces around 3,500kg of medicinal cannabis per year consisting of dried flower, oils and tinctures. Murray Meds has harvested and packed 350kg so far this year, even before the full picking season starts in April.

During morning trade, the ECS share price shot up to 5.4 cents. However, its shares have since retreated to 5.0 cents at the time of writing, up 16.28%.

What’s pushing the ECS share price higher?

ECS Botanics advised that it has signed a binding term sheet with Flowerday Holdings Pty Ltd. The acquisition will see ECS own 100% of the issued capital in Murray Meds, and 100% of the issued share capital in Flowerday Farms. In addition to the transaction, ECS will also purchase Flowerday Land Property.

Under the deal, ECS will pay $1 million for the rights to 100 million fully paid ordinary shares, deemed at an issue price of 5 cents per share. The company will pay a further $1.5 million within 12 months, pending completion of the Flowerday Land Property purchase.

ECS Botanics said the shares will be escrowed on a split basis for 12 (50%) and 24 (50%) months.

The company said once the acquisition is concluded, ECS will be one of largest vertically integrated medicinal cannabis businesses in Australia. The deal complements the company’s main operations based in Tasmania, as well as recent agreements such as its MediPharm Labs takeover.

What did management say?

ECS managing director Alex Keach welcomed the acquisition, saying:

As a combined group, we are positioning to become the largest and most geographically diversified cannabis producer in Australia. Murray Meds has harvested its maiden THC crop and currently has another crop growing.

This deal allows ECS to deliver earlier and more substantial revenue, while adding value to cannabis as communicated in our December announcement to purchase equipment for the extraction of cannabis resin. The deal sets us up nicely to become a globally recognised large scale, low-cost cultivator and manufacturer of medicinal cannabis.

Murray Meds founder and managing director Nan-Maree Schoerie, added:

The opportunities that this deal creates for Murray Meds, its customers and employees is tremendously exciting.

Both organisations are very grounded in their approach to delivering affordable medicinal cannabis as naturally and sustainably as we can, with shared values and an inherent drive to deliver for patients and shareholders.

More reading

• The Xero (ASX:XRO) share price is down 10% in 2021: Is this a buying opportunity?
• How I’d identify the best shares to buy now for the next decade
• Afterpay and Creso Pharma were among the most traded shares on the ASX last week
• What’s with the Legend Mining (ASX:LEG) share price today?
• Are the recent US elections turbocharging the ASX 200?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the ECS (ASX:ECS) share price is soaring 16% higher today appeared first on The Motley Fool Australia.

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The Xero Limited (ASX: XRO) share price is out of form again on Tuesday and dropping lower.

At the time of writing, the business and accounting platform provider’s shares are down 3% to $131.97.

This means the Xero share price is now down 10% since the start of FY 2021 and almost 17% from its all-time high.

Why is the Xero share price dropping lower?

Investors have been selling Xero and other tech shares recently and rotating into value and cyclical stocks.

This has led to the S&P/ASX All Technology Index (ASX: XTX) sinking 5.5% since the turn of the year, compared to a 1.7% gain by the benchmark S&P/ASX 200 Index (ASX: XJO).

Is this a buying opportunity?

One broker that would see the weakness in the Xero share price as a buying opportunity is Goldman Sachs.

Late last year the broker initiated coverage on the company with a buy rating and $157.00 price target.

Based on the latest Xero share price, this price target implies potential upside of 19% for its shares over the next 12 months.

Why does Goldman like Xero?

Goldman Sachs is a big fan of the company’s cloud-based accounting software. It notes that the value proposition for its SME customers includes its ease-of-use, a single source of “truth” (for the business & their accountant), and its ecosystem of 1,000+ best-in-class apps that provide a broad range of software solutions.

It also points out that Xero has a total addressable market (TAM) of NZ$14 billion per annum at present across its key markets. Based on its FY 2020 performance, this means that it has only penetrated 4.6% of this market.

This in itself gives it a long runway for growth. However, the broker sees opportunities for this TAM to grow even larger.

It explained: “We estimate Xero has a core TAM of NZ$14bn p.a. across its key markets (4.6% penetrated in FY20). However as it broadens and monetizes its app ecosystem, and expands into new geographies, we estimate this will open a further NZ$62bn in addressable TAM, providing a multi-decade runway for strong revenue growth.”

“Combined with attractive unit economics at maturity (GSe 40% EBIT margins), we believe the long-term earnings opportunity for Xero is material,” it concluded.

All in all, this could make it worth taking a closer look at Xero’s shares after their poor start to the year.

More reading

• ASX 200 down 0.4%: Afterpay tumbles, bank shares lower, gold miners crash
• Why Costa, Monash IVF, Newcrest, & Xero shares are dropping lower
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rose 1.6%

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Finding the best shares to buy now for the long term is a tough task. The economic outlook is uncertain, and may experience further deterioration in the short run depending on how the coronavirus pandemic progresses. Furthermore, a number of industries could experience major change as a result of the pandemic and its impact on consumer tastes.

As such, buying companies with flexible business models and strategies, as well as capital to invest in long-term growth, could be a shrewd move. They may be better able to adapt to a fluid economic environment.

The best shares may have flexible business models

The best shares to buy today may have strategies and financial positions that can be used to successfully adjust to changing industry trends. For example, companies that have a low proportion of fixed costs may withstand a period of weaker sales should political and economic risks increase.

Similarly, companies that have solid balance sheets may be able to raise capital more easily to invest in new growth areas that have arisen as a result of the coronavirus pandemic.

Investors may be able to unearth such companies by assessing their fundamentals. For example, a company’s annual report and recent investor updates provide information regarding their financial position and strategy.

Businesses with low debt levels and access to substantial credit lines may have the financial flexibility to make necessary adjustments in what could be a period of rapid change. Company strategies that embrace evolving customer tastes may also be more successful in the long run than entrenched plans that become outdated.

Searching for companies with weak near-term outlooks

Of course, the best shares to buy today are likely to offer good value for money. However, the stock market rally in the second half of 2020 means that many high-quality businesses now trade on relatively high valuations.

As such, investors may wish to consider sound companies that are currently experiencing difficult operating conditions. For example, they may be facing disruption caused by coronavirus, or weak demand for their products as a result of declining consumer confidence.

Should they have the financial means to survive the short-term challenges they face, over the long run they may be able to deliver impressive returns due in part to their low prices. They may be among those shares that benefit the most from a long-term stock market recovery.

A diverse range of stocks

It continues to be difficult to assess how the economy will change in the next decade. Some of the best shares may even struggle to adapt and deliver growth in an economy that has an unclear future.

As such, it is a good idea to diversify across a broad range of businesses within a portfolio. Doing so can mean less risk, as well as greater returns as the world economy gradually recovers from the challenges faced in 2020.  

More reading

• Afterpay and Creso Pharma were among the most traded shares on the ASX last week
• What’s with the Legend Mining (ASX:LEG) share price today?
• Are the recent US elections turbocharging the ASX 200?
• Here’s why the Fortescue (ASX:FMG) share price is up 12% in a month
• Leading brokers name 3 ASX shares to sell today

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Australia’s leading investment platform provider CommSec has released data on the most traded ASX shares on its platform from last week.

Once again, there were a few regulars but also a couple of lesser known shares making the cut.

Here’s the data:

Betashares Nasdaq 100 ETF (ASX: NDQ)

This exchange traded fund (ETF) was the most traded share on the CommSec platform last week. It accounted for 2% of total trades on the platform, with buyers attributable to 85% of them. This ETF is particularly popular with investors as it gives them exposure to the likes of Apple, Amazon, Facebook, and Tesla. After a 30% gain in 2020, investors may be hoping for more of the same in 2021.

Creso Pharma Ltd (ASX: CPH)

This cannabis company was popular with investors again last week. Its shares accounted for 1.8% of trades on CommSec. Approximately 57% of these came from the buy side. That group of investors will have been pleased to see the cannabis company’s shares jump 33% over the period. This gain was driven by news that the Democrats won control of the US Senate. The Democrats are widely expected to decriminalise cannabis in the near future.

Core Lithium Ltd (ASX: CXO)

Core Lithium was a new entry to the top five, with its shares being responsible for 1.8% of trades on the platform. 65% of these trades came from buyers, who bid its shares 55% higher for the week. Investors have been buying lithium shares after the price of the battery making ingredient started to recover.

Afterpay Ltd (ASX: APT)

The Afterpay share price may have lost 1.7% of its value last week, but that didn’t stop the buyers from flooding in. The buy now pay later provider’s shares accounted for 1.7% of trades on CommSec, with 65% of them coming from buyers.

Zip Co Ltd (ASX: Z1P)

This fellow buy now pay later provider was popular with investors again last week. Zip’s shares were responsible for 1.5% of trades on the platform. Though, only 48% of these came from buyers. Despite this, the Zip share price climbed 4.7% over the five days. Some investors may be optimistic that its upcoming second quarter update will be a strong one.

More reading

• Here’s why the Creso Pharma (ASX:CPH) share price is jumping 13% higher today
• The biggest ASX bulls are about to get their faith tested
• 5 things to watch on the ASX 200 on Tuesday
• Why ASX cannabis shares are cheering the US elections
• ASX 200 down 0.4%: Afterpay tumbles, bank shares lower, gold miners crash

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Legend Mining Limited (ASX: LEG) share price, up 9% this year and 50% over the past 12 months, has yet to move today on the company’s latest drill results.

Despite some promising drilling data, the Legend share price is flat in afternoon trading, still sitting at its opening price of 12 cents.

What did Legend Mining report this morning?

In an ASX announcement this morning, Legend Mining said the latest assay results from a diamond drillhole at its Mawson prospect in Western Australia revealed it to be the best hole to date.

The Mawson prospect holds both nickel (Ni), Copper (Cu) and Cobalt (Co).

The results showed nickel values up to 3.26%, copper values up to 3.84%, and cobalt values up to 0.17%. The company said that metallurgical test work is under way.

Commenting on the results, Legend Mining managing director Mark Wilson said:

These assay results are further confirmation of our earlier assessment that hole 34 is the best hole drilled at Mawson to date. The combination of the widths and grades of the massive sulphides in this hole support our conviction that we are dealing with a mineralised system of substance at Mawson.

The purpose of the hole was to conduct Phase 1 metallurgical tests and the results of this test work will be reported once received.

Meanwhile further assay results from 2020 drilling programs are rolling in for compilation and assessment. Once integrated with existing data, they will assist in future drill planning for the 2021 field season.

Legend Mining share price and company snapshot

Legend Mining is an Australian minerals exploration company. The company’s focus is its nickel-copper Rockford Project in the Fraser Range of Western Australia. Legend Mining shares first listed on the ASX in August 1995.

Analysts are widely predicting the demand for nickel and copper to grow, as both metals are needed for the transition to sustainable energy sources and both are used in infrastructure and building construction. Copper prices reached 8-year highs last Thursday, trading at US$8,179 (AU$10,622) per tonne.

Year-to-date, the Legend Mining share price is up 9.1%. That compares to a 0.3% gain for the broader All Ordinaries Index (ASX: XAO).

Despite shares crashing more than 45% during the wider COVID-19 market selloff in February and March last year, patient Legend Mining shareholders are unlikely to be complaining.

Over the past 12 months the Legend Share price is up 50%. The All Ords, over that same time, remains down 0.7%.

More reading

• The Neuren (ASX:NEU) share price is falling today despite positive news
• Why the Cann Group (ASX:CAN) share price is moving today
• Why the IMEXHS (ASX:IME) share price soared 6% higher today
• Why the DroneShield (ASX:DRO) share price is surging higher
• Here are the best All Ordinaries performers of 2020

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is trading flat at 6,695 points. The ASX 200 still isn’t quite at the heights we saw back in February last year, when it hit a new record high of 7,162.5 points just before the coronavirus-induced market crash.

Even so, we are getting pretty close to those levels again. Since the start of the year, the ASX 200 has really hit the ground running. Even though the new year is only 12 days in (and 7 trading days), the index is already up 0.7% for the year to date.

That doesn’t seem like a lot on face value, but if that pattern holds all year, the ASX 200 would be in for a rollicking good time in 2021.

But why are shares continuing to climb? Let’s be frank, there hasn’t exactly been a stack of good news in 2021 so far, whether that be on the economic or coronavirus fronts.

Well, it’s possible that what’s happening in the United States is helping enormously. I know how that sounds less than a week after the shocking scenes in the US Capitol building emerged.

US Senate elections send shares higher

It has to do with the (somewhat overshadowed) Senate elections that took place last week on 5 January (6 January our time). These were the runoff elections for the 2 US Senate seats of the state of Georgia.

Against the odds, the Democratic Party won both seats in the conservative Southern state. That puts the balance of power in the Senate evenly divided between Democrats and Republicans at 50-50.

And those wins mean that once president-elect Joe Biden and vice president-elect Kamala Harris are sworn in, the Democrats will control the US Senate. Why? According to the US constitution, the vice president breaks a Senate tie if the chamber is evenly split.

That also means that, come 20 January, divided government will end. And the Democratic Party will control the ‘trifecta’ of the House of Representatives, the Senate, and the White House for the first time since 2010.

This situation is what’s got investors hot under the collar. As an indication, the ASX 200 is up 1.9% since 6 January, even though it’s only up 0.7% year to date.

But why? What do US politics have to do with the Australian share market?

Well, as you might gather, the performance of the US markets are one of (if not the) largest influences over our own ASX. And the Democratic sweep of the Congress has also gotten American investors fired up. The US S&P 500 Index (INDEXSP: .INX) is up 2.75% since 5 January.

So what’s so exciting about the Democrats winning control of Congress?

The importance of the ‘trifecta’

Well, in the US, laws need to advance through both Houses of Congress and be signed by the president to become law. If any of those branches are controlled by another party, it greatly reduces the chances of all but the most bipartisan bills becoming law.

But since all 3 are going to be in Democratic hands come 20 January, Joe Biden’s party can get much of their agenda through without Republican support.

According to reporting in the Australian Financial Review (AFR), the priorities for the incoming Biden Administration are going to revolve around a lot more stimulus spending. Over the past month, outgoing President Donald Trump, as well as the Democrats, have been calling for a round of US$2,000 stimulus cheques to go out to most Americans.

But the Republican Senate blocked this measure. It instead limited the cheques to US$600. According to the AFR, one of the first cabs off the rank on 20 January will be getting the larger cheques out as soon as possible.

Additionally, the Democrats are also hoping to ink a new large-scale infrastructure spending bill, send additional monetary aid to the states, and increase spending in healthcare. And that is, of course, in addition to the unprecedented level of monetary easing (near-zero interest rates and quantitative easing (QE)) that the US Federal Reserve is promising to keep up going forward.

All of this stimulatory spending bodes extremely well for the US economy, but more importantly the share market. And that is why investors, both over in the US, and here in Australia, have been sending shares higher in 2021 so far. After these positive developments for investors as we kick off 2021, it will be interesting to see where the rest of the year takes us.

More reading

• Here’s why the Fortescue (ASX:FMG) share price is up 12% in a month
• ASX 200 up 0.4%: Altium disappoints, ARB impresses, Mesoblast charges higher
• Capital returns galore from cashed-up ASX retail stocks
• The biggest ASX bulls are about to get their faith tested
• 5 things to watch on the ASX 200 on Tuesday

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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fortescue Metals Group Limited (ASX: FMG) share price was one of the rather surprising standout performers on the S&P/ASX 200 Index (ASX: XJO) in 2020.

Last year, Fortescue delivered a 115% return to investors. This result was not including the hefty dividend payments shareholders also were happy to receive throughout the year (when, incidentally, many other ASX blue chips were slashing their payouts).

The ASX iron ore miner started 2020 at just under $11 a share, but finished the year up at just a touch over $23 a share. That phenomenal annual return was just the latest piece of good news that long-term Fortescue shareholders have been treated to. Over the past 5 years, this company has given investors an incredible return of 1,529%.

But these numbers have not prevented Fortescue from exploring new heights in recent weeks. Fortescue shares are up another 12.4% over the past month alone. The miner also hit a new all-time high share price of $26.40 a share just last Friday. So why are Fortescue shares continuing to soar of late?

Fortescue shareholders rake in the dough

Well, the most obvious reason why Fortescue shares are exploding ever higher is the soaring price of iron ore itself. As we speak, iron ore is trading for US$169.14 a tonne. That’s a level we haven’t seen since the ‘mining boom’ days of 2012.

Cast your mind back to 23 November, and iron ore was going for ‘just’ US$124 a tonne. This is obviously a massive appreciation and benefits Fortescue disproportionately. Because a miner’s costs to extract ore are relatively fixed, any extra cash the miner can get for its iron pretty much flows straight to the bottom line.

This explains why Fortescue is not the only ASX miner climbing to new perches recently. BHP Group Ltd (ASX: BHP) has also been hitting new all-time highs recently, as has Rio Tinto Limited (ASX: RIO).

But Fortescue (along with the other ASX iron miners) is also benefitting from the political landscape over in the United States. According to reporting in the Australian Financial Review (AFR), the recent US senate elections have also helped. Given President-elect Jo Biden’s Democratic party will soon control the Senate as a result of the Democrats winning two Senate seats in Georgia, the party now controls all three branches of the US government. That means that larger stimulus spending, particularly on infrastructure, is now far more likely in the next two years. More infrastructure spending in the world’s largest economy means more demand for steel. And the key ingredient for making steel is, of course, iron ore.

Is the Fortescue share price a buy today?

I’m sure there are many investors out there who are wondering if it’s too late to buy into Fortescue at these heights. One broker who thinks it might be is Goldman Sachs. This broker currently has a ‘hold’ rating on Fortescue shares, with a price target of just $20.18 a share. That implies a potential downside of almost 20% on current prices.

More reading

• Are the recent US elections turbocharging the ASX 200?
• ASX 200 up 0.4%: Altium disappoints, ARB impresses, Mesoblast charges higher
• Capital returns galore from cashed-up ASX retail stocks
• The biggest ASX bulls are about to get their faith tested
• 5 things to watch on the ASX 200 on Tuesday

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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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 shares:

AGL Energy Limited (ASX: AGL)

According to a note out of Credit Suisse, its analysts have retained their underperform rating and cut the price target on this energy company’s shares to $11.10. The broker believes AGL Energy will have to battle with a sizeable decline in wholesale energy prices in the future. In light of this, it sees significant downside to its earnings in the coming years and has downgraded its estimates to reflect this. The AGL Energy share price is changing hands for $11.97 this afternoon.

Magellan Financial Group Ltd (ASX: MFG)

A note out of Goldman Sachs reveals that its analysts have retained their sell rating and $52.52 price target on this fund manager’s shares. The broker believes that Magellan is not well-positioned for an environment of unified democratic control of government in the US. It also notes that its funds under management fell 1.6% in December due to negative investment returns of 2.1% and its performance fees fell short of expectations. The Magellan share price is under pressure today and has now fallen below this target to $49.55.

QBE Insurance Group Ltd (ASX: QBE)

Analysts at Macquarie have retained their underperform rating and cut the price target on this insurance giant’s shares to $7.70. The broker has concerns over the company operating without a permanent CEO in these tough times and sees risks ahead in FY 2021 because of this. Furthermore, due to the large loss that QBE is expecting in FY 2020, Macquarie is forecasting a significant dividend cut. The QBE share price is trading at $8.51 today.

More reading

• ASX 200 drops 0.9%
• Why the QBE (ASX:QBE) share price is in focus today
• What’s been happening with the Magellan (ASX:MFG) share price?
• 3 highest yielding ASX dividend shares
• Here are 3 ASX shares trading near their 52-week lows

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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