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This week we heard how current conditions remind Forager Funds chief investment officer Steve Johnson of 2017, and why he reckons it’s now time to flee to “boring” ASX shares.

Interest rates are at all-time lows, shares are at historic high valuations, inflation is worryingly persistent, energy prices are skyrocketing and post-COVID reopening is overheating the economy.

“People are inventing new metrics like revenue multiples to justify absurd prices for growth stocks,” he wrote in Money magazine.

“More importantly, there are very few pockets of undue pessimism.”

All this means it’s time to pull your money out of risky hyper-growth companies and bank on reliable oldies, according to the investment veteran.

“It is time, once again, to be thinking about the benefits of safe and boring.”

Here are 2 specific ASX shares that Johnson named that fit that bill:

Industrial services is boring, so it’s perfect for now

Industrial services provider Downer EDI Limited (ASX: DOW) has been involved in a wide variety of sectors like transport, utilities, mining, and construction. The company hires 52,000 employees.

“If that sounds boring, that’s the whole point,” said Johnson.

“After a number of slip-ups in recent years, the company has been focussing on making itself as boring as possible.”

He added that Downer EDI has been phasing out the “higher-risk” construction arm, had sold off its laundries business and most of its mining services division.

“By 2024, we estimate 80% to 90% of revenue will come from government-related entities.”

This de-risking was not duly recognised by ASX investors, with the share price stuck at 2016 levels until the annual results in August.

“We think it can generate an 8% to 9% cash return from these prices, is committed to sharing most of that cash with shareholders and should be able to generate growth in line with the wider economy,” said Johnson. 

“In a world of expensive assets, that adds up to just fine.”

Downer shares closed Friday at $6.05, which is 11% up for the year.

TPG beat the ACCC, but the watchdog might be right after all

Telecommunications stocks have been out of favour with investors the past few years.

The industry had been caught in a race to the bottom with mobile and internet plans highly commoditised.

In this environment, TPG Telecom Ltd (ASX: TPG) was the growing challenger to the giants like Telstra Corporation Ltd (ASX: TLS) and Optus.

“The original TPG was a popular founder-led business which David Teoh built from the ground up and created a huge amount of shareholder value,” said Johnson.

“His final act was to merge with Vodafone, much to [ACCC chair] Rod Sims’ ire… TPG won, the ACCC lost and the combined company is now a significant player with more than 5 million mobile subscribers and 2 million fixed broadband subscribers.”

But now Teoh is no longer involved with the business and TPG looks no different to the big boys.

In fact, TPG shares have lost more than 26% since the Vodafone merger in the middle of 2020.

Johnson, though, reckons the exact concerns that the ACCC held bodes well for this ASX share’s prospects.

“There is upside in potential NBN price cuts and the networks themselves are starting to bypass the NBN with home 5G wireless devices,” he said.

“In mobile, all 3 large players are talking about a ‘better’ pricing environment, with all of them selling new contracts at better than the current average.”

Such a pickup in the sector, Johnson estimates, will result in a cash return of 8% per annum on TPG’s current valuation.

“Unlike Downer, we might need to wait a few years while TPG repays some debt, but shareholders should see most of that paid out as dividends from the 2023 financial year,” he said. 

“The telco sector is mature, boring, and stable, but we will take 8% over most of the opportunities we are seeing today.”

TPG shares closed Friday at $6.35, down 10.5% since January.

The post 2 unfashionable ASX shares for rough times: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended TPG Telecom 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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Are you interested in boosting your income portfolio with some new additions? Then below are two options to consider.

Here’s why these ASX dividend shares have been rated as buys:

Coles Group Ltd (ASX: COL)

The first dividend share to look at is this supermarket giant. It has been a solid performer over the last few years, particularly during the height of the pandemic, and has continued this positive form in FY 2022.

Coles recently reported a 1.5% increase in total first quarter sales to $9,756 million. This growth was driven by its Supermarket and Liquor businesses, which offset weakness in the Express business due to lockdowns.

Looking ahead, the future looks bright for Coles thanks to its strong market position, defensive qualities, and its focus on automation to cut costs and boost its online business. The latter includes constructing new smart distribution centres with automation giant Ocado.

Citi is positive on Coles’ outlook and is forecasting fully franked dividends of 65 cents per share in FY 2022 and then 72 cents per share in FY 2023. Based on the current Coles share price of $17.83, this will mean yields of 3.65% and 4%, respectively. Citi has a buy rating and $19.60 price target on its shares.

Transurban Group (ASX: TCL)

Another ASX dividend share for income investors to look at is Transurban.

It is one of the world’s leading toll road operators with a collection of important roads in Australia and North America. While lockdowns and border closures have weighed on its performance this year, things are looking very positive now Australia is reopening.

This is expected to lead to busier roads and underpin solid income and distribution growth over the coming years.

For example, Morgans is forecasting dividends of 39 cents per share in FY 2022 and then a jump to 57 cents per share in FY 2023. Based on the current Transurban share price of $13.47, this will mean yields of 2.9% and 4.2% respectively. Morgans has an add rating and $14.79 price target on the company’s shares.

The post Analysts name 2 ASX dividend shares to buy today appeared first on The Motley Fool Australia.

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• Halo Food (ASX:HLF) share price leaps 7% on Coles deal
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. 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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If you’re looking for growth shares, then look no further. Listed below are two ASX growth shares which have been tipped for strong growth in the future.

Here’s why analysts have rated them as buys:

Adore Beauty Group Limited (ASX: ABY)

The first ASX growth share to look at is Adore Beauty. It is an integrated content, marketing and e-commerce retail platform that partners with a broad and diverse portfolio of approximately 260 brands and 10,800 products.

It grew at a very strong rate in FY 2021 and has followed this up with more of the same in FY 2022. Adore Beauty recently released its first quarter update and revealed revenue of $63.8 million, up 25% on the prior corresponding period.

The good news is that even when you annualise this, it is still only a fraction of the Australian beauty and personal care (BPC) market which is currently estimated to be worth $11.2 billion and growing. This gives Adore Beauty a long runway for growth over the next decade.

The team at UBS is positive on Adore Beauty. The broker currently has a buy rating and $6.00 price target on its shares.

NEXTDC Ltd (ASX: NXT)

Another ASX growth share for investors to consider is NEXTDC.

It owns a collection of world class Tier III and Tier IV data centre facilities in key locations across Australia. From these centres, NEXTDC provides scalable, on-demand services to support outsourced data centre infrastructure and cloud connectivity for enterprises of all sizes.

NEXTDC has been growing at a strong rate for many years and appears well-placed to continue this positive trend long into the future. This is thanks to the ongoing structural shift to the cloud which is underpinning growing demand for capacity in its centres.

The team at Goldman Sachs is very positive on the company’s outlook. So much so, it believes NEXTDC will grow its operating earnings by ~20% per annum through to at least FY 2024.

The broker has a buy rating and $14.40 price target on the company’s shares

The post 2 fantastic ASX growth shares to buy right now appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group 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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The fund manager Wilson Asset Management (WAM) has told investors about two compelling ASX shares that it has in its portfolio.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

There’s also one called WAM Capital Limited (ASX: WAM) which targets “the most compelling undervalued growth opportunities in the Australian market”.

The WAM Capital portfolio has delivered an investment return of 16.6% per annum since its inception in August 1999, before fees, expenses and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAO) return of 8.7% per annum over the same timeframe.

These are the two ASX shares that WAM Capital outlined in its most recent monthly update:

Enero Group Ltd (ASX: EGG)

WAM Capital described Enero Group as a global marketing and communication services business that has more than 650 staff across 13 cities around the world.

At the company’s recent annual general meeting (AGM) , it provided an a trading update that WAM Capital’s fund managers thought was impressive. Growth was ahead of market expectations.

Enero’s Group’s revenue for the three months to September 2021 increased 22.6% year on year to $45.6 million. The ASX share’s Hotwire, BMF and OB Media businesses all outperformed.

The fund manager noted that management expect the strong momentum to continue and WAM’s analysts believe that the business is trading at a material discount to offshore peers despite stronger growth prospects.

WAM also said that it believes Enero Group’s “strong” balance sheet provides ample room for accretive acquisitions in the future and view the upcoming initial public offering (IPO) of the comparable business System1 in the United States as a valuation re-rating catalyst.

Pact Group Holdings Ltd (ASX: PGH)

Pact Group was described as an Asia Pacific packaging business that manufactures and supplies plastic and metal packaging for a range of trusted brands.

Last month, it released a trading update that showed how the COVID-19 pandemic affected its FY22 first quarter sales. This came at the same time as input costs are increasing with oil prices rising.

The fund manager thinks that the ASX share is trading below its underlying value. WAM believes that Pact Group’s long-term strategy, with a focus on increasing recycling capability and reducing inefficiencies, will drive revenue growth and margin expansion in the future.

Takeover battle

WAM Capital also noted that it is currently going through a takeover process to attempt to buy the shares of PM Capital Asian Opportunities Fund Ltd (ASX: PAF).

The post Wilson Asset Management (WAM) thinks these 2 top ASX shares are a buy appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Friday the S&P/ASX 200 Index (ASX: XJO) finished the week on a very positive note. The benchmark index rose 0.8% to 7,443 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to have a subdued start to the week. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points lower this morning. This is despite it being a solid end to the week on Wall Street, which saw the Dow Jones rise 0.5%, the S&P 500 climb 0.7%, and the Nasdaq storm 1% higher.

NAB goes ex-dividend

The National Australia Bank Ltd (ASX: NAB) share price is likely to drop today when it trades ex-dividend for its final dividend for FY 2021. Last week the banking giant declared a fully franked final dividend of 67 cents per share with its full year results. This brought its full year dividend to 127 cents per share. Eligible NAB shareholders can look forward to receiving this latest dividend on 15 December.

Oil prices fall

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a poor start to the week after oil prices slumped on Friday night. According to Bloomberg, the WTI crude oil price is down 1% to US$80.79 a barrel and the Brent crude oil price has fallen 0.8% to US$82.17 a barrel. Oil prices fell on concerns the US may release oil from strategic reserves to cool prices.

Gold price rises

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could start the week on a positive note after the gold price edged higher on Friday night. According to CNBC, the spot gold price climbed 0.25% to US$1,868.50 an ounce. The gold price had its best week since May amid inflation fears.

Incitec Pivot results

The Incitec Pivot Ltd (ASX: IPL) share price will be on watch today when it releases its full year results. The agricultural chemicals company had a disappointing first half. However, management guided to a much stronger second half, so investors will be looking for the company to deliver on that.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

More reading

• How do the CBA (ASX:CBA) results stack up against NAB’s?
• These were the best performing ASX 200 shares last week
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• Brokers think the tanking Ansell (ASX:ANN) share price will rebound
• Here are the top 10 ASX shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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If you’re wanting to invest in the small side of the Australian share market, then the three small caps listed below could be worth a closer look.

All three have been tipped for big things in the future. Here’s why these small cap ASX shares could be worth adding to your watchlist:

Alcidion Group Ltd (ASX: ALC)

The first small cap ASX share to watch is this growing informatics solutions company. Alcidion is the company behind healthcare software products Miya, Patientrack and Smartpage. These products are becoming increasingly popular with healthcare institutions and it isn’t hard to see why. Patientrack, for example, helps clinicians know a patient’s status in real-time. It uses predictive algorithms to support time-critical care, allowing doctors to intervene and prevent patient deterioration faster than ever before. Looking ahead, Alcidion appears well-placed for growth in the future thanks to the shift to a paperless environment in the healthcare sector and a number of favourable industry tailwinds.

Bell Potter currently has a buy rating and 45 cents price target on Alcidion’s shares.

BlueBet Holdings Ltd (ASX: BBT)

Another small cap ASX share to watch is BlueBet. It is an online sports betting company that allows users to bet on all Australian and international racing and sports. BlueBet has been growing very strongly thanks to the increasing popularity of sports betting and the shift away from betting houses. The good news is that management is confident that this trend can continue. It also believes it is well positioned to substantially grow its modest share of the market in Australia. In addition, the company is in the process of expanding into the massive US market.

Morgans is bullish on BlueBet and has an add rating and $2.60 price target on its shares.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a growing MedTech software as a service company and the provider of breast imaging analytics and analysis products. Its products improve clinical decision-making and support the early detection of breast cancer. Demand has been growing strongly in recent years and has continued in FY 2022. During the second quarter, the company reported a 63% increase in subscription based revenue. This took its annualised recurring revenue to US$20.4 million at the end of the period. This is still only a fraction of its US$750 million addressable market in just breast cancer screening.

Morgans currently has an add rating and $1.87 price target on the company’s shares.

The post 3 exciting small cap ASX shares to watch appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor 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 and has recommended Alcidion Group Ltd and VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Alcidion Group Ltd and BlueBet Holdings Ltd. 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 big four ASX banks of Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB) have now both reported their results. How do they compare?

How businesses perform in the same industry can indicate whether one is better value for an investor than the other.

First, let’s look at the headline numbers.

Profit growth

NAB reported that it made $6.36 billion of statutory net profit, whilst cash earnings came in at $6.56 billion – growth of 76.8% on FY20. Excluding FY20 large notable items, the cash earnings increased by 38.6%.

Meanwhile, CBA made statutory net profit of $8.84 billion. Cash net profit increased 19.8% to $8.65 billion.

Whilst CBA did make a bigger profit, its profit grew at a slower rate compared to NAB.

Both banks acknowledged that economic conditions had improved and the outlook was better.

Loan impairment expense

It was large loan impairment expenses that hurt the banks in FY20 and a significant improvement in FY21 that helped profit significantly rise.

NAB said that its credit impairment charge in FY21 was a write-back of $217 million, compared to the FY20 charge of $2.76 billion. That significant improvement was due to a reduction in charges for forward-looking provisions and lower underlying charges.

Turning to CBA, its FY21 loan impairment expense was $554 million – an improvement of 78%. CBA said that this reflected improved economic conditions, though it’s maintaining a “strong” provision coverage ratio of 1.63%, reflecting the continuing economic uncertainty.

Net interest margin (NIM)

The NIM is a measure of bank profitability, it shows how much profit a bank is making on lending out money, compared to the cost of funding – like deposits and bonds.

NAB said that its NIM dropped 6 basis points to 1.71%. The big four ASX bank explained that the margin was hurting from the impacts of the low interest rate environment combined with home lending competition and shift to fixed-rate lending.

Meanwhile, CBA’s NIM in FY21 declined by 4 basis points to 2.03%. CBA’s NIM declined less in FY21 than NAB and it’s currently a higher margin.

Balance sheet strength and buy-backs

All of the big banks have seen growing levels of capital on their balance sheet, with the common equity tier 1 (CET1) capital ratios above APRA’s ‘unquestionably’ strong level of 10.5%.

NAB said it had a CET1 ratio of 13% at September 2021. This was an increase of 153 basis points over the financial year. NAB announced at the end of July that it was going to buy back up to $2.5 billion of shares

CBA ended its FY21 with a CET1 ratio of 13.1%. CBA decided to launch a $6 billion off-market share buy-back due to its “strong capital position”.

Both banks have/had large amounts of capital on their balance sheets and are using it to boost shareholder returns.

Dividends

NAB decided to pay an annual dividend of $1.27 per share, which was an increase of 112%. That currently translates to a grossed-up dividend yield of 6.1%.

CBA’s dividend was increased by 17% to $3.50 per share, though it wasn’t cut as much in FY20 as other banks. CBA currently has a grossed-up dividend yield of 4.6%.

NAB shares currently offers a larger dividend yield.

Are the big banks buys?

Plenty of brokers now believe that CBA shares are a sell, such as Citi with a price target of $94.50.

However, NAB ratings are largely hold/neutral with a few buy ratings. Staying with Citi, the broker is neutral on NAB with a price target of $29.50.

The post How do the CBA (ASX:CBA) results stack up against NAB’s? appeared first on The Motley Fool Australia.

More reading

• NAB (ASX:NAB) offers $250,000 loans in 20 minutes in latest competitive push
• Do analysts rate the NAB share price a buy after its FY21 result?
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• Why does NAB’s (ASX:NAB) CEO want house prices to fall?
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating and $17.10 price target on this artificial intelligence data services company’s shares. While the broker acknowledges that Appen will need a big second half to achieve its guidance, it is encouraged by the recent update from industry peer Telus. It recently reported a 30% increase in third quarter revenue following a rebound in demand. This could bode well for demand for Appen’s services. The Appen share price ended the week at $10.84.

Breville Group Ltd (ASX: BRG)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $36.00 price target on this kitchen appliance company’s shares. This follows the release of a trading update at its annual general meeting. Morgan Stanley was pleased with the update and believes the company is well-placed to achieve consensus estimates in FY 2022. Outside this, its analysts remain positive on Breville’s long term outlook thanks to its reinvestments and global expansion. The Breville share price was fetching $29.94 on Friday.

Liontown Resources Limited (ASX: LTR)

Analysts at Macquarie have retained their outperform rating and lifted their price target on this lithium developer’s shares to $2.00. This follows the release of the definitive feasibility study for its Kathleen Valley project. The broker was pleased with the higher production forecast and the earlier than expected start date. The Liontown Resources share price ended the week at $1.57.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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Motley Fool contributor 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 and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. 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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There are quite a few ASX shares that may still be solid ideas to consider for the long-term, despite the strong run of the ASX share market.

Companies that are expecting to deliver a high level of earnings growth over the next few years may be able to positively surprise investors.

Businesses that are growing across the world may be even more compelling.

Here are two ASX shares to consider:

Webjet Limited (ASX: WEB)

Webjet is one of the leading global travel companies.

The company is still being impacted by COVID-19 effects, but it’s expecting to return to profitability as domestic and international travel resumes.

With WebBeds, the business to business part of the company, it has an ongoing transformation strategy to emerge as the global number one provider.

Webjet believes it’s going to achieve positive operating cashflow in the first half of FY22 after reducing costs and becoming more efficient.

Management think the company is on track to be at least 20% more cost-efficient at scale, suggesting a “significant” leverage opportunity. When markets normalise, Webjet says that WebBeds will have greater market share, lower costs and improved profitability.

Previously, Webjet was targeting a Webjet earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 50%. But now management think that it can reach a 62.5% margin because of those cost savings.

The ASX share also believes that it can take increasing domestic market share, with a growing presence by its online travel agency (OTA) segment. Its advantages include the accelerating structural shift to online and a “superior” technology offering. It now has a 11.3% market share, up from 5.6% in April 2020.

Australia’s domestic and international borders are now opening up, opening the gates to more volume.

It’s currently rated as a buy by UBS, with a price target of $6.85.

Doctor Care Anywhere Group PLC (ASX: DOC)

Doctor Care Anywhere is a UK-based telehealth business that wants to provide the best care possible through digitally-enabled, joined up, evidence-based pathways with its platform. It works with health insurers, healthcare providers and corporate customers.

The business continues to scale quickly.

Last month it released its quarterly numbers for the three months to 30 September 2021.

It said that revenue grew quarter on quarter by 21.6% to £5.8 million. This was driven by 30.6% quarter on quarter growth of consultations to 116,800. A record 41,000 patients had their first ever Doctor Care Anywhere consultation during the quarter, while more than 65% of consultations were delivered to returning patients.

There was also continued progress in joining up patient pathways, with 5,100 patients completing the secondary care diagnostic pathway – this was growth of 54.5%.

The ASX share is working on overseas expansion. It has completed the acquisition of Australian tele-health and tele-mental provider, GP2U Telehealth.

Doctor Care Anywhere has also entered the self-pay market in the Republic of Ireland through channel partner Boots.

Management expect that the company can grow its FY21 revenue by at least 100% compared to FY22. Its financial year lines up with the calendar year.

Doctor Care Anywhere says that not only is its solution more convenient for patients, but it is also demonstrating value for doctors and insurers by removing inefficiencies and reducing costs throughout the patient journey, The company is expecting higher profit margins as the pandemic effects ease on the UK clinical workforce.

Taking steps to improve profit margins above pre-COVID levels remains a “key focus” for the company.

The post 2 ASX shares that may be too good to ignore appeared first on The Motley Fool Australia.

More reading

• The Webjet (ASX:WEB) share price was $12 before COVID-19 hit. Can it ever get back there?
• These are the 10 most shorted ASX shares
• Here’s why travel shares led the ASX 200 on Monday
• Here are the top 10 ASX shares today
• Why is the Webjet (ASX:WEB) share price taking off on Monday?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Doctor Care Anywhere Group PLC. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Doctor Care Anywhere Group PLC. 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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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 investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Ansell Limited (ASX: ANN)

According to a note out of Macquarie, its analysts have retained their underperform rating and cut the price target on this health and safety products company’s shares to $30.70. This follows the release of an update at its annual general meeting. Macquarie notes that Ansell will need a big second half to achieve consensus estimates. However, it doesn’t appear confident it will be able to deliver on this. The Ansell share price ended the week at $30.51.

Ramsay Health Care Limited (ASX: RHC)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $60.00 price target on this private hospital operator’s shares. Its analysts were not surprised by Ramsay’s weak first quarter update last week which revealed a 1.3% increase in first quarter revenue to $3.2 billion but a 39.5% decline in quarterly profit after tax to $58.1 million. Morgan Stanley had been anticipating a disappointing result due to margin pressures. The Ramsay share price was fetching $68.50 at Friday’s close.

Wesfarmers Ltd (ASX: WES)

Analysts at Citi have retained their sell rating but lifted their price target on this conglomerate’s shares to $50.00. This follows news that Wesfarmers has signed an agreement to acquire pharmacy chain operator and distributor Australian Pharmaceutical Industries Ltd (ASX: API). Although the broker expects the deal to give its earnings a small boost, it isn’t enough for a change of recommendation. Citi believes that Wesfarmers’ shares are overvalued at the current level. The Wesfarmers share price was trading at $59.42 at the end of the week.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

More reading

• Brokers think the tanking Ansell (ASX:ANN) share price will rebound
• Broker gives its verdict on the Ramsay Health Care (ASX:RHC) share price
• 5 things to watch on the ASX 200 on Friday
• Why Liontown, Nearmap, Ramsay, and Xero shares are sinking today
• Top brokers name 3 ASX shares to sell today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Ansell Ltd. and Ramsay Health Care 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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