On Wednesday I looked at a few shares that have recently found favour with brokers and been given buy ratings.
Unfortunately, not all shares on the market are in favour with brokers right now. Three which have been given sell ratings are listed below. Here's why brokers think you should avoid them:
Australian Pharmaceutical Industries Ltd (ASX: API)
According to a note out of Credit Suisse, it has downgraded this pharmacy chain operator and supplier's shares to an underperform rating from neutral with a lowered price target of $1.55. The broker believes that the company's shares could come under pressure next month when its reports its latest results. Credit Suisse appears to think that investors have become too focused on its Clearskincare acquisition and lost focus on the challenging operating environment its core business is facing. I agree with Credit Suisse on Australian Pharmaceutical Industries and think investors ought to stay clear of its shares until they have seen its results.
Independence Group NL (ASX: IGO)
A note out of the Macquarie equities desk reveals that its analysts have downgraded the miner's shares to an underperform rating from neutral and cut the price target on them to $4.20. According to the note, the broker has made the move after adjusting its nickel price forecasts. This has led to a significant cut to its earnings forecasts for Independence Group this year. I'm sitting on the fence with independence Group and would class it as a hold at these levels.
Nufarm Limited (ASX: NUF)
Analysts at Deutsche Bank have retained their sell rating and cut the price target on this crop protection company's shares to $6.10 following the release of a weaker than expected full year result on Wednesday. According to the note, the broker appears concerned by numerous risks that Nufarm faces such as drought, higher input costs, and U.S. tariffs. I agree with Deutsche and would avoid Nufarm's shares after that result. I don't believe its shares are trading at a level that offers a sufficient risk/reward.
