Here’s why these 4 ASX shares were crushed by the market today

Today was a great day for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), which gained more than 1.5% after heavy selling in recent weeks. A whole bunch of stocks got left behind however – and some of them for good reason.

Here’s why these 4 stocks fell today:

Slater & Gordon Limited (ASX: SGH) crashed 15.8% to $0.905 after the company announced there was a significant risk it would not meet its earnings guidance for 2016, which was reaffirmed to the market as recently as 30 November, less than three weeks ago.

Investors will surely be wondering if further downgrades are coming or indeed if management has understated how much of an impact the proposed changes in the UK are likely to have. Class actions have been declared against companies in the past – like Myer Holdings Ltd (ASX: MYR) – in similar situations and I would not be surprised to see one launched against Slater & Gordon.

As the media noted, today’s update is a black mark against their ability to forecast future earnings and with that in mind there is too much uncertainty to buy shares in Slaters today.

Infomedia Limited (ASX: IFM) drifted down 4.2% to $0.632 as the company continues to languish without a replacement CEO, even though management indicated its search for one was ‘well advanced.’

Today’s prices are the cheapest that Infomedia has been since the start of 2014, and the company – along with its 5.5% dividend – is starting to look attractive.

Hub24 Ltd (ASX: HUB) fell 5.9% to $3.50 after very strong performance recently following a failed takeover offer from IOOF Holdings Limited (ASX: IFL). In fact, investors shouldn’t be surprised to see some profit-taking as Hub24 shares are now up 300% for the year and I believe the company has moved beyond fair value.

As it is still unprofitable I do not expect shares will move materially higher until the company progresses towards profitability.

The share price of ALS Ltd (ASX: ALQ) shed 5% to $3.39 after management announced the completion of the Retail Entitlement Offer for the company’s recent capital raising. Shareholders subscribed for only 43% of the shares available under the Retail Entitlement Offer, reflecting a lack of confidence in the company’s prospects over the next few years.

ALS does possess an attractive moat and 40% of revenues come from outside the resources sector, and this number is growing. However, investors should expect mediocre performance over the next couple of years thanks to weak resource markets.

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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia owns shares of Infomedia. 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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