Check Out These 5 'Loser' Stocks During Tax-Loss Selling Season

Dec. 20, 2013 3:58 PM ETGDX, NEM, SQM, STRA, WW, CRUS1 Comment
Kevin Berk profile picture
Kevin Berk

Every year investors review their portfolios and projected taxes and many prudently decide to minimize their taxes by selling some of their losers. This is intuitively obvious, but periodically academic research bears it out as well. In a year where the S&P's total return is close to 30%, big losers are harder to find. As they don't often say, "There is always a bear market somewhere." Rationally or not, stocks that lost value during the year often lose more value (or fail to rise with the market) as they are more aggressively sold off to stave off the tax man. One might argue that in such a big up year, these losers might take it even harder on the chin.

Obviously, you should not buy companies at the end of the year just because they've gone down. You can create a good candidate list by performing a screen for large decliners and then searching for higher quality names to research further. I've collected a list of potential 2014 winners from 2013's losers. Each of these companies was sold off for its own reasons so you should do your own research before diving in. Do it quick however, 2014 is coming fast. I believe these five stocks have a reasonable risk/reward profile going into 2014. While solid investments in their own right, they should receive an extra boost as the tax loss sellers are no longer pressuring the stocks.

Tax Loss Stock Ticker YTD Loss Ent. Val.
Chemical & Mining Co. of Chile SQM -59.5% 7.10 B
Strayer Education STRA -38.9% 0.40 B
Weight Watchers WTW -38.5% 4.09 B
Cirrus Logic CRUS -31.4% 0.99 B
Newmont Mining NEM -50.2% 17.01 B

Sociedad Quimica y Minera De Chile

SQM (translated as: Chemical & Mining Co. of Chile) was underperforming even before getting crushed when

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Kevin Berk profile picture
Kevin Berk is a strategic investor, entrepreneur and an expert in online media. He helped develop online ventures at CitySearch and Disney, and was instrumental in the merger of TicketMaster and CitySearch and the combined company's IPO. (It is now owned by IACI.) He founded in the online search and directory space. He then led the advertiser products team at LookSmart before co-founding online job search company YorZ and writing his blog, Berk Sure Has a Way ( Kevin combines an insider's understanding of online content, search and advertising with an eye for stocks and a clear writing style.You can follow him on Twitter:!/kevinberk

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