What is a tax loss stock, you may ask? It is a stock that is down for the year, with a price that is abnormally suppressed in December due to investors who want to establish a loss before the end of the year, for tax purposes. Investors like to buy these stocks in anticipation of a bounce back in January.
I have gone through a database of all the stocks that are down by at least 50% year-to-date. Then I extracted the companies that are profitable, based on their forward price-to-earnings ratio, and a price to earnings growth ratio of less than 3 (the lower the PEG, the better the buy).
Here is the list:
AK Steel (AKS)
Big 5 (BGFV)
CPL Properties (CBL)
DHI Group (DHX)
Francesca’s Holdings (FRAN)
Genesco (GCO)
The Meet Group (MEET)
NuStar (NSH)
PCM (PCMI)
Smart Sand (SMD)
The Shop Holdings (TTS)
Disclosure: The author didn’t own any of the above at the time the article was written.