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

Could there be worse to come for Fortescue Metals Group Limited (ASX:FMG), Bellamy’s Australia Ltd (ASX:BAL), Slater & Gordon Limited (ASX:SGH), and Adacel Technologies Limited (ASX:ADA)?

| More on:
a woman

Today was a down day for the S&P/ASX 200 (INDEXASX: ^AXJO) (ASX: XJO), which lost 0.6% to 5111 points. The axe fell extra heavily on some companies, which are detailed below:

Fortescue Metals Group Limited (ASX: FMG) fell 7% to $2.87 after trading as high as $3.25 early this morning and closing above $3 yesterday. Initially driving the rise was an 18% increase in the value of iron ore overnight, although shares began to fall after the company announced a memorandum of understanding with Vale SA, which might buy up to 15% of Fortescue’s issued shares on-market.

Despite today’s fall, Fortescue shares are still up 43% for the week, and 33% in the past 12 months.

Bellamy’s Australia Ltd (ASX: BAL) dropped 4% to $9.86 on no news today, complemented by a fall from smaller competitor A2 Milk Company Ltd (Australia) (ASX: A2M), which lost 6% to $1.56. Both Bellamy’s and A2 have experienced a strong run in their share prices over the past 12 months, which at times have reached levels that might challenge conventional valuations. Potential investors are counting on an explosion of consumer demand in China, which would be a long-term tailwind for both stocks.

Despite pulling back significantly from recent highs, Bellamy’s shares are still up 264% in the past 12 months.

Slater & Gordon Limited (ASX: SGH) lost 6% to $0.365 today as ongoing investor uncertainty about the company’s operations and financials continues to batter the share price. Indeed, the company’s ongoing restructure and talks with lenders has even lead some to question whether the company could be going broke, a question which is difficult to answer. Other listed law firm, Shine Corporate Ltd (ASX: SHJ) made headlines recently when shares crashed after management announced issues with its Work-In-Progress (WIP) accounting. Shine shares also fell 4% today.

Slater & Gordon Limited has lost 95% of its value in the past 12 months.

Adacel Technologies Limited (ASX: ADA) shed 5% to $1.98 as the market pares back expectations for the stock, which delivered a very successful half-yearly report in January. However, the fact that shares fell after posting a 40% leap in revenue and a 606% increase in profit implies that the stock has a significant amount of growth already factored into it. Management has stated that they believe the current strong momentum will continue for the remainder of 2016, and that guidance of a 70% increase in profit before tax should be achievable.

Adacel shares are up 434% in the past 12 months.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor Sean O'Neill owns shares of A2 Milk. 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

The share price of ASX infant products retailer Baby Bunting Group Ltd (ASX:BBN) has been a solid performer so far …

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

A new landmark report by the Intergovernmental Panel on Climate Change (IPCC) was released earlier this week. It provided a …

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest …

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos Limited (ASX: AMS) share price has been on a tear this past week, rising 15% on the back …

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

Online furniture retailer Temple & Webster Group Ltd (ASX: TPW) had a breakout year in 2020, moving from relative obscurity …

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

Shares in ASX healthcare company Polynovo Limited (ASX: PNV) almost doubled in price last year. And, despite a shaky start …

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

Investing in other geographic markets has become a popular way to diversify a portfolio. The risks associated with being exposed …

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

Despite the News Corporation (ASX: NWS) share price getting a 31% bump between November last year and today, News Corp …

Read more »