A tax loss stock is a stock that has been beaten down at the end of the year due to tax selling. The stock is usually one which traded much higher near the beginning or the year and has been dropping throughout the year. By the time the close of the year approaches, investors look for stocks they can dump at a loss to offset any profits, and this dumping drives the price down even further, usually far more than what would normally take place if it wasn't year end.
Investors buy these tax loss stocks in the hope that they will snap back in January. When looking for a tax loss stock, you can't buy any stock that has dropped a lot during the year. You want stocks that have earnings and growth prospects. Here is a selection of a few of them.
Profire Energy (PFIE) is in the business of designing and marketing oil field combustion management technologies and products. It traded as high as 5.89 earlier this year and is now trading less than 2.30 per share. The stock trades at 19 times trailing earnings and 8 times forward earnings. The PEG ratio is a very favorable 0.63. Revenues for the latest quarter were up over 68%. To top it off, the company is debt free with over $18 million in cash.
U. S. Silica Holdings (SLCA) produces commercial silica and traded over 73 per share and is now less than 26 per share. The price to earnings ratio is 13 with a forward PE of 9. The PEG ratio is an extremely favorable 0.26. Revenues rose 67% for the latest quarter with earnings skyrocketing 93.5%. As an added bonus, the stock has a 1.8% yield.
Hopefully, one of the tax loss stocks will help you save on taxes. If you like interesting stock lists like this, you should check out the lists at WallStreetNewsNetwork.com.
Disclosure: Author didn't own any of the above at the time the article was written.