3 ASX stocks slammed by the market


The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has dropped 0.4%, to close at 4,369.5 as concerns over economic growth in Europe and the US ‘fiscal cliff’ reared their heads yet again. Over the previous two days, rising confidence that the US would avoid the fiscal cliff was attributed to driving the markets higher – which illustrates how irrational stock markets can be.

The Australian dollar fell against the US dollar, currently buying 103.5 cents.

These three stocks lost more than 5%.

David Jones Limited (ASX: DJS) lost 16 cents, or 6.2% to close at $2.41, after the department store retailer reported a 0.3% rise in sales – the first in two years. Investors weren’t happy – considering competitor Myer Holdings (ASX: MYR) reported 0.8% growth in same store sales over the same period. Both retailers remain cautious about the future, despite both reporting positive growth for the first time in ages.

Boart Longyear Limited (ASX: BLY) continues its fall, losing 5.9% today to close at $1.19 – a far cry from the $4 it was trading at just seven months ago. The drilling services and equipment supplier announced a second earnings forecast downgrade yesterday, due to lower demand for its products and services. In an effort to cut costs, the company announced that it was relocating its Perth operations to Poland.

Flexigroup Limited (ASX: FXL) lost 5.6% to end at $3.73. Investment bank Goldman Sachs downgraded the financial services group to ‘Neutral’, after noting the stock had risen more than 100% since January. The broker believes the company has plenty of growth ahead of it, but thinks much of it has been priced in. Maybe they read the Motley Fool’s article written last week?

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Motley Fool writer/analyst Mike King owns shares in David Jones. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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