The end of the year brings with it an array of decisions that need to be made, one of which is related to tax-loss harvesting.
Investors actively involved in tax planning will be deciding what to names sell in order to book losses and/or offset gains generated during the year. The potential opportunity is to identify attractive but beaten-down names that may come under further selling pressure up until Dec. 31 or are range-bound as investors lock in losses. The hope, but not always the reality, is that in the new year investors again will embrace these names.
To that end, I screened for names that met the following criteria:
- down at least 30% year to date,
- forward price/earnings ratios below 15 in the next two fiscal years
- minimum market cap of $100 million
Forty-two names made the cut. It's an eclectic list, to be sure, though here are three that caught my attention as ugly as they may appear now.
Crude oil transporter Gener8 Maritime (GNRT) is down 54% year to date and 70% since its 2015 initial public offering. The stock currently is trading at about 5x and 4x 2017 and 2018 consensus earnings estimates, respectively, and at just 0.25x tangible book value per share. It has $100 million in cash but ample debt at nearly $1.45 billion and owns 45 tankers.
Weight Watchers International (WTW) is one of those names that some value aficionados have been bullish on over the years, but for the most part it has not worked out that well. Shares are down an ugly 57% year to date, but hope springs eternal. Consensus forward earnings estimates put P/E ratios at 9x for 2017 and 8x for 2018. The balance sheet is still cringe-worthy in my view, although total debt has been reduced from $2.36 billion in 2013 to slightly more than $2 billion.
Shares of newspaper giant Gannett (GCI) are down about 40% year to date and trade at about 9x 2017 and 2018 consensus estimates. Keep in mind this company primarily is in the newspaper business, which was spun off last year. (The company's media broadcast and digital media businesses, including television stations, make up Tegna (TGNA) .) GCI had an awful third quarter, which sent shares to the mid- $7 level, but it since has recovered somewhat, partially due to the fact that it dropped its bid to acquire Tronc (TRNC) last month. The stock currently yields 6.25%. This is now a cash-cow business at best.