Why these 4 shares crashed on the ASX today

Northern Star Resources Ltd (ASX:NST) and Freedom Foods Group Ltd (ASX:FNP) shares tumbled today.

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Heading into the New Year’s holiday trading volumes on the ASX remained thin although that didn’t stop several popular shares plunging lower as investors headed for the exits. Let’s take a look at what may be behind some of today’s price action.

Domino’s Pizza Enterprises Ltd. (ASX: DMP) shares dropped 3.1% to $57.48 despite the pizza chain releasing no specific news to the ASX. The business recently announced the acquisition of a German pizza chain for a price tag up to EUR 79 million, which it expects to be 4%-5% earnings accretive on an adjusted FY15 pro forma basis. This news put a rocket up the share price and with the stock up 127% in 2015, today’s selling is likely the result of some profit taking.

Bellamy’s Australia Ltd (ASX: BAL) is the baby formula business that has been on a tear recently thanks to soaring demand for its organic baby food products. Today the shares fell 9.4% to $14.02 in what is the consequence of profit taking and day traders trying to take advantage of a volatile share price.

Northern Star Resources Ltd (ASX: NST) shares fell around 3.15% today despite the gold miner releasing no news to the market. Recent Australian dollar strength may not have helped this stock, while the start of a US rate-hiking cycle may also put pressure on the spot gold price as its attractiveness as a safe haven diminishes versus money market and other types of US dollar linked securities.

Freedom Foods Group Ltd (ASX: FNP) shares crashed 10% as ‘bubble talk’ starts to hit the infant formula and dairy sector, with some investors taking a profit while the going remains good. Freedom Foods is also in the fast-growing gluten and allergen free premium food markets and has a reasonable long-term outlook, although investors must be sure to pay a reasonable price for the expected growth.

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Motley Fool contributor Tom Richardson owns shares of Bellamy's Australia. You can find Tom on Twitter @tommyr345 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 Bellamy's Australia. 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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