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Why these 4 ASX shares are ending the week deep in the red

The benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is on course to have a disappointing end to the week. In afternoon trade the index is down 0.7% to 5,747 points.

Four shares which are ending the week deep in the red are listed below. Here’s why they have sunk lower today:

The Apiam Animal Health Ltd (ASX: AHX) share price has plunged 30% to 80 cents after the veterinary products and services provider released a trading update. Although the company looks set to have a solid second-half, an increasing cost base and weaker margins appears to have the market concerned. Whilst it looks cheap now, I believe there are better options in the industry.

The Fortescue Metals Group Limited (ASX: FMG) share price has fallen 5% to $4.82 after the iron ore price slid lower again overnight. Increasing stockpiles at Chinese ports appears to have traders worried that demand for the steel-making ingredient could soon soften. Although its share price has fallen sharply this year, I think it could still fall lower if iron ore prices weaken.

The Select Harvests Limited (ASX: SHV) share price has dropped 9% to $4.38 after the leading almond producer warned that a weaker-than-expected crop would materially impact its full-year earnings. Unfortunately this means that Select Harvests’ shares are now down 35% year-to-date.

The Thorn Group Ltd (ASX: TGA) share price has tumbled 4% to $1.19 following the release of its full-year results. A subdued outlook for the year ahead and a cut to its dividend appear to be the reason behind today’s drop. Whilst its shares do look now look dirt cheap, it is worth remembering that they are cheap for a reason. A class action and a rise in the number of customers behind on their repayments are just two risks the company faces.

Finally, instead of trying to catch a falling knife with the shares above, I would suggest investors look at these shares which are at the top of their game right now. I expect them to provide strong gains over the next few years.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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