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On Friday the S&P/ASX 200 Index (ASX: XJO) finished a difficult week with the smallest of positive days. The benchmark index rose a fraction of a point to 6,715.4 points.

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

ASX 200 expected to fall.

It looks set to be a disappointing start to the week for the Australian share market on Monday. According to the latest SPI futures, the ASX 200 is poised to open the week 16 points or 0.25% lower. This follows a poor end to the week on Wall Street, which saw the Dow Jones fall 0.6%, the S&P 500 drop 0.7%, and the Nasdaq tumble 0.9% lower.

Ramsay upgraded to conviction buy rating.

The Ramsay Health Care Limited (ASX: RHC) share price could push higher today after analysts at Goldman Sachs upgraded its shares to a conviction buy rating from neutral. The broker has also lifted its price target on the private hospital operator’s shares to $70.00. Goldman believes the improvement in near-term fundamentals is not yet reflected in consensus forecasts or current trading multiples.

Oil prices drop lower.

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could start the week in the red after oil prices dropped lower. According to Bloomberg, the WTI crude oil price fell 2.3% to US$52.36 a barrel and the Brent crude oil price dropped 2.3% to US$55.10 a barrel. Oil prices tumbled after demand fears hit sentiment.

Gold price sinks.

Gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could come under pressure today after the gold price sank lower on Friday. According to CNBC, the spot gold price dropped 1.2% to US$1,829.90 an ounce. Traders were selling the precious metal after the US dollar strengthened.

Dexus upgraded.

The DEXUS Property Group (ASX: DXS) share price will be on watch today after Goldman Sachs took its sell rating off the property company’s shares and upgraded them to a neutral rating. Goldman has a $9.65 price target on its shares and believes that the company is doing all the right things in a softening market. The broker estimates that its shares offer a 5.6% dividend yield at the current level.

More reading

• 2 ASX dividend shares with yields over 5% right now
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• ASX 200 ends flat on Friday
• Why the Northern Star and Saracen Mineral merger is getting closer

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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At the small end of the market there are a good number of companies with the potential to grow strongly in the future.

Two that have been tipped as future stars are named below. Here’s what you need to know about them:

Damstra Holdings Ltd (ASX: DTC)

The first small cap to look at is this growing integrated workplace management solutions provider.

Damstra’s cloud-based workplace management platform is used by businesses to track, manage, and protect their workers and assets.

The company also offers solutions which are proving very popular during the pandemic. These include fever detection and mobility tracking.

Damstra recently strengthened its portfolio with the acquisition of Vault Intelligence. This adds solutions combining health, safety, compliance, and risk management.

The company has been a positive performer in FY 2021, reporting first quarter revenue of $5.2 million. This was up 34% on the prior corresponding period.

Analysts at Morgan Stanley are positive on its prospects. They have an overweight rating and $2.00 price target on its shares. This compares to the current Damstra share price of $1.49.

MyDeal.com.au Limited (ASX: MYD)

Another small cap to watch is MyDeal. As its name implies, MyDeal is an online retail marketplace provider. It has a focus on furniture, homewares, appliances, technology, baby products, and hardware.

Due to the accelerating shift to online shopping because of the pandemic, MyDeal has been a very strong performer recently.

For example, the online retailer reported a 317% increase in first quarter gross sales to $56.67 million. This was underpinned by a 268% increase in active customers to 669,897.

RBC Capital Markets is a fan of the company and sees more growth ahead for it. The broker has a buy rating and $1.60 price target on its shares. This compares to the latest MyDeal share price of $1.37.

More reading

• 2 rapidly growing ASX ecommerce shares to buy
• 2 exciting small cap ASX shares growing fast
• 2 ASX ecommerce shares to buy in January
• 2 exciting ASX mid cap tech shares to buy in 2021
• 2 growing small cap ASX shares to watch in 2021

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 recommends Damstra Holdings Ltd. The Motley Fool Australia has recommended Damstra 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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There are some ASX dividend shares out there that have high dividend yields but have paid consistent or even growing dividends, including through COVID-19.

Some investors may be looking for higher yields with the Reserve Bank of Australia (RBA) interest rate being so low.

Here are some examples:

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is a large retailer of phones, computers, appliances and other devices and accessories.

The company played its part in helping people get ready to learn and work at home during the difficult COVID-19 lockdown periods. It may also have benefited from the government stimulus.

In FY20, JB Hi-Fi achieved 11.6% growth of sales, earnings before interest and tax (EBIT) went up 30.5% and net profit rose by 33.2%. It was this growth that funded the 33.1% growth of the dividend to $1.89 per share.

The ASX dividend share has a trailing grossed-up dividend yield of 5.3% at the current JB Hi-Fi share price.

JB Hi Fi’s growth has continued into the first quarter of FY21, with JB Hi-Fi Australia sales growth of 27.3%, JB Hi-Fi New Zealand sales declined by 2.5% and the The Good Guys sales growth was 30.9%.

Nick Scali Limited (ASX: NCK)

Nick Scali is one of the largest retailers of furniture in Australia.

The company delivered flat profit growth in FY20 – whilst sales revenue fell 2.1% to $262.5 million, net profit after tax (NPAT) was $42.1 million, the same as the prior corresponding period. This was achieved by the EBIT margin increasing by 90 basis points to 23.2%.

Nick Scali increased its FY20 final dividend by 12.5% on the back of the strength of its sales orders for the first half of FY21. That brought the Nick Scali full year dividend to 47.5 cents per share.

The ASX dividend share has a trailing grossed-up dividend yield of 6.3%.

Nick Scali is expecting a lot more growth in the FY21 first half. It recently provided guidance that it’s expecting net profit after tax (NPAT) for the six months to 31 December 2020 to be $40.5 million, up approximately 100% on the underlying profit from the prior corresponding period. Total written sales orders grew by 45% in the first quarter and grew 58% in the second quarter.

The sales order book was at an all-time high at 31 December 2020 and this is expected to translate to material revenue and profit growth in the second half of FY21.

Nick Scali continues to add more stores to its network in Australia and New Zealand to increase its footprint and potential customer base.

Rural Funds Group (ASX: RFF)

Rural Funds is a farmland real estate investment trust (REIT) that owns farm types including cattle, vineyards, almonds, macadamias and cropping (sugar and cotton).

The agricultural landlord leases its farms to a variety of high-quality tenants that are among the biggest of their industry in Australia. Examples are: Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE), Olam, JBS and Australian Agricultural Company Ltd (ASX: AAC).

All of the contracts with these tenants are long-term and have rental growth built into them. That growth is either a fixed 2.5% annual increase, or it’s linked to CPI inflation, plus occasional market reviews.

The ASX dividend share also has a strategy of investing some of its rental profit each year into farm improvements to boost the value and rental potential of the properties. This has worked particularly well with cattle properties in recent years.

These two strategies are a large reason why Rural Funds has a goal of increase the distribution by 4% each year.

In FY21 Rural Funds plans to pay a higher distribution of 11.28 cents per unit, equating to a distribution yield of 4.5%.

More reading

• What’s in store for the ASX tech sector in 2021?
• What does 2021 hold for ASX retail shares?
• The Accent Group (ASX:AX1) share price just got hit by a broker downgrade
• Retail sales rose 7% in November to boost ASX retail shares
• Capital returns galore from cashed-up ASX retail stocks

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates 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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An ASX dividend share is worth more today than perhaps any time in living memory. With interest rates at record lows (near zero in fact), sources of yield outside the share market have more or less dried up.

Unlike in years gone by, investors who are nervous of the inherent volatility of the share market cannot turn to government bonds or term deposits to find a ‘safe’, inflation-beating yield.

Although the S&P/ASX 200 Index (ASX: XJO) and ASX shares are almost at their most expensive point today than at any time after the coronavirus-induced market crash of March 2020, there are still plenty of shares that offer decent, inflation-beating yields, some even exceeding 5%.

ASX dividend shares, of course, are not safe investments. A company has absolutely no obligation to maintain a dividend payout. And the market can dent your principle capital on any trading day, sometimes permanently. But if you want a 5% yield today, there are few alternatives.

So, here are 2 ASX dividend shares that offer a 5% yield or greater on current pricing.

2 ASX dividend shares offering a 5% yield today

Telstra Corporation Ltd (ASX: TLS)

Telstra is our first ASX dividend share offering a yield of more than 5% today.

In 2020, Telstra paid out 2 dividends, each consisting of an 8 cents per share payout, complete with full franking credits. That gives Telstra shares a trailing dividend yield of 5.13%. That grosses-up to 7.33% with franking.

The Telstra share price has come under fire in recent months due to the company’s struggles with the ongoing NBN rollout, together with its thin margins. Even so, its annual general meeting last year, Telstra’s management all-but-committed to maintaining a 16 cents per share annual payout in 2021. If that indeed proves to be the case, Telstra is once again set to offer a grossed-up 7.33% yield in 2021 on recent pricing.

Rio Tinto Limited (ASX: RIO)

Our second ASX dividend share with a 5% or greater yield today is this mining giant. Rio shares have been on a tear in recent months, buoyed by a rocketing iron ore price. In fact, Rio is up more than 30% since just the start of November.

The Rio share price also recently just hit a new record all-time high of $127 a share. Deposit these gains, Rio shares are still offering a hefty trailing dividend yield of 4.7% on current prices, which grosses-up to 6.71% with full franking credits. Rio’s dividend is arguably less safe than Telstra’s given how volatile commodity prices (especially iron ore) tend to be.

Even so, as long as the iron ore price stays at, or even near, its current level, investors can likely expect the dividends to keep flowing from their Rio shares.

More reading

• ASX banks to steal the dividend crown from mining stocks by next year
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• ASX 200 ends flat on Friday
• Brokers name 3 ASX shares to buy right now

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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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According to the latest cash rate futures, the market has priced in a 75% probability of the Reserve Bank of Australia cutting the cash rate down to zero next month.

Whether this happens or not, time will tell. But one thing that appears more certain is that the days of generous interest rates are some time away.

In light of this, the share market looks set to be the best place to earn a passive income for a while yet.

But which ASX dividend shares should you buy? Here are two to consider next week:

Bravura Solutions Ltd (ASX: BVS)

Bravura is a wealth management and transfer agency software solution provider with a number of popular solutions that are being used by large financial institutions.  These include its key Sonata wealth management platform, the Rufus transfer agency solution, the Garradin back office solution, and the Midwinter financial planning solution.

Unfortunately, the company has been facing significant headwinds over the last 12 months due to Brexit and COVID-19. However, management appears confident these are short term headwinds and that its growth will resume once the situation eases.

Goldman Sachs agrees with this view and believes the weakness in the Bravura share price is a buying opportunity. It has a buy rating and $4.50 price target on its shares and is forecasting a 10.6 cents per share dividend in FY 2021. Based on the latest Bravura share price, this represents a 3.6% dividend yield.

Wesfarmers Ltd (ASX: WES)

Another option to consider is Wesfarmers. In contrast to Bravura, this conglomerate has been a very positive performer over the last 12 months. This is thanks largely to its key Bunnings business which has been experiencing strong sales growth during the pandemic as consumers redirect their spending from holidays to home improvements.

Pleasingly, Bunnings has been tipped to continue its positive form over the coming years, especially given tax cuts and government stimulus. This should be supported by growth in other businesses such as Kmart, Target, and Catch.

Credit Suisse is positive on the company and has an outperform rating and $55.83 price target on its shares. The broker is also expecting a $1.90 per share fully franked dividend this year. Based on the latest Wesfarmers share price, this will mean a 3.8% dividend yield.

More reading

• Fund managers are buying Domino’s (ASX:DMP) and this ASX share
• With retail sales numbers rising, how are these 3 ASX shares performing?
• Retail sales rose 7% in November to boost ASX retail shares
• 2 star ASX shares to buy for a retirement portfolio
• Capital returns galore from cashed-up ASX retail stocks

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia owns shares of Wesfarmers 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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Warren Buffett and Charlie Munger are two of the most successful investors of all time. Together, they have turned Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B) into one of the most valuable companies in the world.

Interestingly, they have achieved this goal through a relatively simple investment strategy that can be replicated by almost any investor.

In fact, through focusing on value opportunities and investing for the long term, it is possible to build a surprisingly large retirement portfolio – even from having no savings at age 40.

Warren Buffett and Charlie Munger’s value investing approach

Warren Buffett and Charlie Munger seek to buy high-quality companies when they trade at fair prices. As such, they do not necessarily purchase the cheapest shares that are available at any point in time. Nor are they willing to pay a high price for even the most attractive businesses. Rather, they aim to identify companies that have a competitive advantage versus sector peers and purchase them when their share price trades at a discount to intrinsic value.

Clearly, determining a company’s intrinsic value, or real worth, is very subjective. So, too, is deciding whether a company is high quality or not. However, through assessing a specific sector and building up knowledge about the companies that operate within it, it is possible to identify the most attractive stocks. Waiting for buying opportunities can be tough, but profitable, in the long run as they deliver capital growth from a low share price.

In today’s market, a number of strong businesses appear to trade at attractive prices after the 2020 stock market crash. As such, there may be opportunities for investors to follow Warren Buffett and Charlie Munger’s strategy to generate high returns in the long run.

A long-term approach to investing

Of course, Warren Buffett and Charlie Munger have built Berkshire Hathaway to its current size over many decades. They have relied on compounding to turn attractive returns into a vast portfolio. They have also been able to overcome various market declines simply by adopting a buy-and-hold strategy.

An investor aged 40 is likely to have sufficient time to do likewise. Certainly, they may not end up with a portfolio valued in the billions. However, even obtaining a similar return to that of indices such as the S&P 500 Index (SP: .INX) or FTSE 100 Index (FTSE: UKX) can turn a modest investment into a large sum. For example, assuming an 8% annual return over a 25-year time period would mean a total return of around 600%.

Therefore, investing today using a similar approach to that followed by Warren Buffett and Charlie Munger could be a sound move. It may enable an investor to turn a modest initial investment into a surprisingly large portfolio so that they can enjoy greater financial freedom in older age.

More reading

• Is Warren Buffett already planning for the next market crash?
• 3 things to expect from Berkshire Hathaway in 2021
• World’s 10 biggest companies are now worth 12% of Earth’s GDP

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: short January 2021 $200 puts on Berkshire Hathaway (B shares) and long January 2021 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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 some ASX tech shares that are delivering strong growth over the years. They could be worth looking over.

Here are some ideas:

Redbubble Ltd (ASX: RBL)

Redbubble is an online marketplace business for customers to buy artist-produced products from one of two websites – Redbubble.com or TeePublic.com.

The company sells a variety of product lines including apparel, stationery, housewares, bags, wall art, masks and so on.

There has been a large shift to e-commerce over the past 12 months as a result of the global COVID-19 pandemic. Redbubble has been one of the beneficiaries of this trend.

FY20 saw marketplace revenue grow by 36% to $349 million. Gross profit increased by 42% to $134 million. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 141% to $15.3 million and reported EBITDA rose by 358% to $5.1 million. It made $38 million of free cashflow in that year.

The ASX tech share subsequently gave a trading update for the first quarter of FY21. It said that, after a positive delivery adjustment was removed from the figures, marketplace revenue went up 98% to $139.3 million, gross profit grew 118% to $59.6 million and it generated $17.2 million of earnings before interest and tax (EBIT).

At the time of the FY21 first quarter update, Redbubble CEO Martin Hosking said: “The strategic priority for the group now is to ensure we extend the market leadership we have established. We intend to invest in the customer experience to improve loyalty and retention and ensure long-term higher levels of growth. The company has the resources to undertake the anticipated investments and margin structure to ensure it can do so while remaining profitable.”

Joseph Kim from Montgomery Investment Management said: “While Redbubble has clearly been a “stay-at-home” trade, we believe the business has the opportunity to emerge a longer-term structural winner from COVID-19 should it capitalise in the recent spike in user and customer interest as a result of recent lockdown measures.”

Betashares Asia Technology Tigers ETF (ASX: ASIA)

This exchange-traded fund (ETF) is invested in many of Asia’s biggest technology businesses, outside of Japan.  

The ASX tech share has a total of 50 holdings, with some of the biggest positions being: Samsung, Taiwan Semiconductor Manufacturing, Tencent, Meituan, Alibaba and JD.com.

Betashares said that due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector.

It has an annual management fee of 0.67%. Betashares Asia Technology Tigers ETF has delivered elevated returns over the past year with a net return of 62%. Since the ETF’s inception, it has delivered an average return of 33.5% per annum. Over the past five years, the index that the ETF tracks has delivered a return of 24.6% per annum.

Altium Limited (ASX: ALU)

The Altium share price has dropped by 19.4% over the past month. The electronic PCB software business wants to be the world leader of its industry.

However, the company is currently going through difficulties because of COVID-19 impacts. FY21 first half revenue fell by 3% to US$89.6 million. Within that update, there were a couple of positives. Electronic manufacturing has rebounded with Octopart benefitting from the recovery and achieving 19% revenue growth for the half. Management said that this is a positive leading indicator for PCB design growth that should drive Altium sales in the second half.

The ASX tech share continues to pivot towards the cloud with its Altium 365 product which could unlock other revenue growth avenues for the company.

According to Commsec, the Altium share price is valued at 38x FY23’s estimated earnings.

More reading

• 2 outstanding ASX ETFs to buy
• These were the worst performing ASX 200 shares last week
• 2 fantastic ASX shares to buy and hold until 2031
• 2 ASX ETFs to buy for 2021 and beyond
• Are these 2 beaten-up ASX shares turnaround ideas?

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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 caught my eye are summarised below.

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

Healius Ltd (ASX: HLS)

According to a note out of Credit Suisse, its analysts have retained their outperform rating and $4.30 price target on this healthcare company’s shares. The broker believes that Healius is well-placed to benefit from increased demand for COVID testing. Combined with a reduction in costs and smart investments, it is expecting strong earnings growth in the near term. The Healius share price ended the week at $3.88.

Nuix Ltd (ASX: NXL)

Analysts at Morgan Stanley have initiated coverage on this investigative analytics and intelligence software provider’s shares with an overweight rating and $11.00 price target. The broker believes Nuix is a long term structural growth story with a long runway ahead of it. And although it sees some risks from much larger competitors, that isn’t enough to stop it from rating it as a buy at the current level. The Nuix share price last traded at $9.08.

Premier Investments Limited (ASX: PMV)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and lifted the price target on this retail conglomerate’s shares to $28.00. This follows the release of its guidance for the first half, which was significantly higher than the broker was forecasting. In fact, it was more than its estimates for the full year. The positive trends driving this outperformance have led to Macquarie upgrading its earnings estimates for the coming years. The Premier Investments share price ended the week at $24.31.

More reading

• Top brokers name 3 ASX shares to sell today
• Why BrainChip, Pilbara Minerals, Premier Investments, & Tyro shares are dropping lower
• Is it too late to buy Premier Investments (ASX:PMV) shares?
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises 0.1%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia has recommended Nuix Pty 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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As a big fan of growth shares, I feel very fortunate that the ASX is not short of quality options for growth investors.

But with so many to choose from, which ones should you buy? Two top growth shares for investors to look at today are listed below. Here’s what you need to know about them:

ELMO Software Ltd (ASX: ELO)

The first growth share to look at is ELMO. It is a growing cloud-based human resources and payroll software company that provides businesses in the ANZ and UK markets with a unified platform that streamlines a wide range of everyday processes.

ELMO has been growing at a very strong rate over the last few years and looks set to build on this in FY 2021. Especially given the recent acquisitions of complementary businesses Breathe and Webexpenses. It is forecasting annual recurring revenue (ARR) of $81.5 million to $88.5 million in FY 2021. This will be up 47.9% to 60.5%, respectively, on FY 2020’s ARR of $55.1 million,

Morgan Stanley is a fan of the company and has an overweight rating and $9.70 price target on its shares. The ELMO share price ended the week at $6.60.

Kogan.com Ltd (ASX: KGN)

Kogan could be an ASX share to buy, especially if you’re looking for long term options. This ecommerce company could be a great buy and hold option due to the structural shift to online shopping that is being accelerated due to the pandemic.

Kogan looks well-positioned to profit from this shift due to the growing popularity of its website and its recent acquisitions. The latter includes its recent purchase of Mighty Ape for $122 million. The New Zealand-based online retailer has a focus on gaming, toys, and other entertainment categories. At the last count it had more than 690,000 unique customers and around 900,000 subscribers.

Analysts at Canaccord Genuity are very positive on Kogan’s prospects, particularly given the Mighty Ape acquisition. Its analysts believe there is potential for significant revenue and cost synergies from the deal.

In light of this, the broker has put a buy rating and $25.00 price target on Kogan’s shares. This compares to the current Kogan share price of $20.06.

More reading

• What’s in store for the ASX tech sector in 2021?
• What does 2021 hold for ASX retail shares?
• 2 rapidly growing ASX ecommerce shares to buy
• 3 highly rated ASX growth shares to buy now
• 2 of the best ASX shares to buy this month

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 recommends Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended Elmo Software and Kogan.com 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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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:

AGL Energy Limited (ASX: AGL)

According to a note out of Morgan Stanley, its analysts have retained their underweight rating and slashed the price target on this energy company’s shares to $10.68. The broker sees notable electricity price weakness ahead and expects the rise of renewable energy to weigh heavily on the company’s earnings in the coming years. The AGL Energy share price ended the week at $12.00.

Pact Group Holdings Ltd (ASX: PGH)

Another note out of Morgan Stanley reveals that its analysts have downgraded this packaging company’s shares to an underweight rating with a $2.60 price target. The broker made the move largely on valuation grounds and notes that there are more attractive options for investors in the industry. And while it sees positive catalysts such as its turnaround plans and asset sales, it isn’t enough to maintain its equal-weight rating. The Pact share price last traded at $2.65.

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. According to the note, Macquarie has concerns that the company is going through a tough period without a permanent CEO. In light of this, it sees risks ahead in FY 2021. In addition to this, the broker is expecting the company to make a big dividend cut due to the large loss that it is forecasting for FY 2020. The QBE share price ended the week at $8.57.

More reading

• Why ASX energy shares are under pressure right now
• Which ASX 200 shares have been slapped with price downgrades this week?
• The AGL (ASX:AGL) share price just hit a 12-year low
• Leading brokers name 3 ASX shares to sell today
• Why the QBE (ASX:QBE) share price is in focus today

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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