MENU

Here’s why these 4 shares crashed on the market today

Welcome to the last day of 2015, Foolish readers. The S&P/ASX 200 (INDEXASX: ^AXJO)(ASX:XJO) finished flat for the year, and these four companies fell even further today.

Here’s why:

Kina Securities Ltd (ASX: KSL) lost 5% to $1.09 in continuing volatility as investors are uncertain what to make of this recently listed, purely Papua New Guinean-focussed stockbroker, lender, and wealth manager. While Kina does carry additional sovereign and currency risks compared to local businesses, it also operates in a market growing more rapidly than the Australian one.

Kina further has a Tier One capital adequacy ratio of 31% (regulatory minimum 8%) and earns a net interest margin of 8% on its loans. These attributes are significantly higher than those enjoyed by Australian market-leader Commonwealth Bank of Australia (ASX: CBA), for example, and are enough to make Kina worthy of closer investigation.

Australian Dairy Farms Group (ASX: AHF) crashed 21% to $0.355 in what represents possible profit taking after yesterday’s 67% increase. Other dairy producers – who are in vogue right now because of the attractiveness of their target Chinese market – also fell in today’s trade, making profit taking look like a distinct possibility. Investors should remain cautious about how much potential growth the market is factoring in to these companies, before buying when prices have been soaring.

Slater & Gordon Limited (ASX:SGH) shares fell 3.5% to $0.83 as investors continue to weigh up the implications of management’s recent withdrawal of profit guidance as well as an ongoing ASIC investigation and potential regulatory changes in the UK. I wrote an article on the company – scheduling for publishing on Sunday – containing links to our earlier coverage of the company through the past six months, which may prove a useful starting point for readers looking to learn more.

EVOLUTION FPO (ASX: FPO) lost 4.5% today after the value of gold slumped overnight, although shares remain up 130% for the year. Shares in other gold miners like Western Areas Ltd (ASX: WSA) and Alacer Gold Corp – CDI (ASX: AQG) also fell on the news. Gold remains a contentious investment idea as some argue rising US interest rates increase the appeal of investments other than gold – thus reducing the appeal of (and demand for) gold.

What would YOU do if the market crashed tomorrow?

With national debt levels at an all-time high and US interest rates set to rise, some experts are predicting a market crash. Discover our Foolish experts' advice on what YOU should do in the event of a crisis -- including expert tips on how to protect YOUR portfolio.

Simply click here for your FREE copy of our newly updated report, "What to Do When the Sharemarket Crashes". Click here, it's FREE!.

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 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.