Three to sell

BB Biotech The Daily Telegraph

Swiss biotech trust BB Biotech is trading at a “hefty premium” of 31% to its net asset value (NAV). “It’s hard to see why… when its two London-listed rivals trade in line with their NAV.” The company has benefited from the success of coronavirus vaccines; Moderna, in which it bought a stake in 2018, remains its largest asset. This has bolstered recent returns, but the longerterm performance of the fund lags behind London-listed rivals Biotech Growth and International Biotechnology, as well as the Nasdaq Biotechnology index. The firm looks overvalued, and there is no clear sign it will outperform its peers. Avoid. SFr78 (£64)

Sweetgreen The Motley Fool

Sweetgreen is a US fast-casual restaurant chain that serves salads. The stock’s “initial pop” after it floated last month seemed “overdone”. It’s a strong brand “and folks aren’t flinching at paying an average of $15 for one of its fresh leafy creations”. But its valuation of $3.4bn looks lofty given that the chain has yet to turn a profit. Competition is intense. The stock “doesn’t deserve to be trading at a double-digit revenue multiple”. Avoid. $29.52

Babcock Investors’ Chronicle

Babcock is an aerospace, defence and security company that struggled in the pandemic. It sold off three businesses worth £400m over the past few months, which will help reduce net debt. Operating profit for the six months to September 2021 was up by 36% and

CEO David Lockwood plans to streamline the company’s structure. “But the task of fixing Babcock is far from over… until a clearer picture emerges, it’s one to avoid.” 306p