These 5 stocks are online for tax loss sale. It’s an opportunity.


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Vertex Pharmaceuticals stock took a hit.

Scott Eisen / Bloomberg

The season for tax loss selling has arrived. Investors who are patient may find that the more vulnerable stocks turn into promising buys.

October often brings the biggest tax loss, when fund managers offload losing stocks to make up for the gains of others. The gain on a stock sold at a profit is taxed, but the loss of a stock sold in the red compensates for this. Taking losses is how a manager reduces the overall amount of gains and lowers a portfolio’s tax bill.

Bank of America

data shows that since 2008, on average, the company’s institutional clients have made their largest share withdrawals in October, the start of the fourth quarter and the last three months of the fiscal year.

This offers investors the opportunity – and it has often proved successful – to buy stocks that are trading at a low price. Since 1986, stocks that fell 10% for the year through October rose 5.6% on average for the next three months, according to Bank of America. They surpass the

S&P 500

average gain of 3.9% during these periods.

Bank of America analyzed stocks on the S&P 500 which had fallen 10% or more from the start of the year through Friday and which are rated Buy by the bank’s analysts. The five worst performing stocks on screen (candidates for a particularly high tax loss sale) are as follows.

Shares of Global Payments (ticker: GPN), a payments technology and software provider with a market cap of $ 46.3 billion, are down 26.7%.


(VTRS), a $ 16.7 billion specialty pharmaceutical company, fell 25.6%.

Lamb Weston Holdings

(LW), a frozen food company with a market cap of $ 8.5 billion, fell 25%. And actions of


(INCY), a $ 14.7 billion biopharmaceutical company, is down 24.4%, while

Vertex Pharmaceutical

(VRTX), a $ 48 billion drugmaker, is down 22.3%.

If the model cited by the bank comes to fruition, the five could experience a nice rebound.

Write to Jacob Sonenshine at [email protected]

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