Tax Selling Rally Stocks for Year End

What is a tax selling rally stock? It is a stock that has dropped significantly during the year and is being severely beaten down at year end due to tax selling.

This is the time of year when investors are looking to take losses on stocks in order to offset any capital gains and even offset ordinary income up to the maximum allowed by the IRS. If your capital losses exceed your capital gains, the excess can be deducted on your tax return and used to reduce other income, such as wages, up to an annual limit of $3,000, or $1,500 if you are married filing separately.

The selling pressure is substantially heavier at year end due to last minute selling compared to other parts of the calendar year, all other things being equal. Stock traders buy these stocks with the anticipation that when the selling pressure is off, the stock price will rise at the beginning of the new year (or possibly shortly before year end in a Santa Claus Rally).

So what stocks may be good opportunities? There are numerous stocks that have dropped over 75% this year but unfortunately, not all of them are generating earnings.

Of the ones that do have earnings, many of them fall in the oil and gas sector. These include:

Emerge Energy (EMES)
Pacific Drilling (PACD)
Seadrill Partners (SDLP)
Ultra Petroleum (UPL)

By the way, all of the above have price to earnings growth ratios [PEG] under 2 and price sales ratios [PS] under 2 also.

Stocks that have Taken a Dump

Other companies with the same drop in stock price and similar ratios, but in other industries include:

Apparel
Christopher & Banks (CBK)
Iconix Brand (ICON)

Metals
Century Aluminum (CENX)

Technology
Intelsat (I)

Shipping
Teekay LNG (TGP)
Teekay (TK)

Obviously, there is no guarantee that these stocks will move up in price when tax selling is over, but when selling pressure ends for anything, not just stocks, prices tend to rise. If you like interesting stock  lists like this, check out many of the free stock lists at WallStreetNewsNetwork.com.

Disclosure: Author didn't own any of the above at the time the article was written.

By Stockerblog.com

Stocks Going Ex Dividend the First Week of October

Here is our latest update on the stock trading technique called 'Buying Dividends'. This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets. In flat or choppy markets, your have to be extremely careful.

In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable Excel list of the stocks going ex dividend during the next week or two. The list contains many dividend paying companies, all with market caps over $500 million, and yields over 3%. Here are a few examples showing the stock symbol, the ex-dividend date and the yield.

Brandywine Realty Trust (BDN) market cap: $1.6B ex div date: 10/1/2010 yield: 4.9%

The Bank of Nova Scotia (BNS) market cap: $54.6B ex div date: 10/1/2010 yield: 3.6%. By the way, several Canadian banks are going ex dividend early October. You should check out the article on high yield Canada banks.

Christopher & Banks Corporation (CBK) market cap: $276.9M ex div date: 10/5/2010 yield: 3.1%

J.C. Penney Company, Inc. (JCP) market cap: $6.0B ex div date: 10/6/2010 yield: 3.1%

The additional ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the latest link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com.

Dividend definitions:

Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Record date: the day when you must be on the company's books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks two business days before the record date.

Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.

Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.

Disclosure: Author does not own any of the above at the time article was written.

By Stockerblog.com