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We have a big sum of Aristocratic Leisure shares in one of our Share Portfolios and our Broker recommends to sell. We want to hold onto these shares as we get good return. Do you have any advice?
A: I guess your broker is just noting the big run up in the share price and that arguably, Aristocrat Leisure (ALL) looks like it is close to fully valued. On broker estimates, it is also trading on reasonably high multiples – 27.2 times FY16 earnings and 22.4 times FY17 earnings.
As a group, the major brokers like it:
With that said, the consensus target price of $15.78 isn’t that much higher than the last price of $15.30. You never go broke taking a profit, but the other axiom is, let your profits run.
I guess that given the multiple, I would be inclined to follow your broker’s advice and take some profit. Why not sell a half?
