Why these 4 ASX shares are crashing today

Credit: Benjamin Horn

After a negative start to the day, the S&P/ASX 200 (INDEXASX: ^AXJO) (ASX: XJO) has rebounded nicely and is now trading firmly in positive territory.

Not all stocks have been so lucky, however, with these four shares struggling to keep up with the market rebound:

Iluka Resources Limited (ASX: ILU)

The mineral sands producer is the worst performer today with its shares crashing nearly 8%. Part of the reason behind today’s fall is that it is trading ex-dividend. Iluka has declared a fully franked dividend of 19 cents a share so investors would have expected a fall of at least 3% today. The severity of today’s fall, however, seems to have been compounded by the overnight reversal in commodity prices. Profit taking could also be playing its part in today’s sharp reversal with the shares gaining around 50% since hitting their 52-week lows.

Senex Energy Ltd (ASX: SXY)

The sharp fall in oil prices overnight has seen most of the oil producers fall heavily today. Senex, however, is one of the worst perfomers with its shares falling more than 5% today. This comes despite the junior producer announcing it has executed a hedging program that will lock in 400,000 barrels of oil at a floor price of $US45 per barrel for the first half of FY17. This appears to be a prudent strategy considering there could be further downside risk in the oil price over the next 12 months. Senex remains one of the more speculative energy stocks in the market, but is my preferred exposure thanks to its competent management and sound financial position.

a2 Milk Company Ltd (ASX: A2M)

Shares of A2 Milk continued their slide today with the shares down as much as 5% at one point. The company has not released any market sensitive announcements recently but sentiment in the baby formula sector has shifted recently with heavy falls affecting fellow competitor Bellamy’s Australia Ltd (ASX: BAL). In addition to fears that the Chinese government is looking to crack down on overseas food imports, milk prices are also reportedly under pressure and this could also be affecting investor confidence specifically with A2 Milk. Despite its recent falls, the shares are still 183% higher than they were 12 months ago.

Worleyparsons Limited (ASX: WOR)

Shares of the mining and energy services provider have fallen more than 6.5% today on the back of weaker commodity prices overnight. Many investors will also be looking to lock in profits, with the shares more than doubling in value in just a matter of weeks after the company squashed rumours of a potential capital raising. WorleyParsons is only suitable for very risk tolerant investors as it still faces an uphill battle in the current environment of depressed commodity prices.

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Motley Fool contributor Christopher Georges owns shares of Senex Energy. 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.

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