On Friday I unveiled the second tranche of my 2019 Tax-Loss Selling Portfolio, four more names that have had a rough time in 2019. These stocks may be challenged for the rest of 2019 due to tax-loss selling but could rebound in 2020 once the dust settles; heavy emphasis on the word could. Today I roll out the final trance of four to bring the portfolio to 12.
Turtle Beach Corp. (HEAR) (down 38% year to date) is the smallest name making the cut this year, with a market cap of $128 million. If you are not familiar with the name, you are not alone. HEAR is in the gaming headset business. After a monster 700% run-up in 2018, shares have disappointed in 2019 and currently trade at 13x next year's consensus estimates. This is not the typical name that I'd be excited about, but does fit the bill as a member of the 2019 Tax-Loss Selling Portfolio.
Chemours Co. (CC) has been feast or famine since it was spun off from DuPont in 2015; last year it was down 42%, and year-to-date in 2019 it is off nearly 41%. That seems to be the way the chemical company cookie typically crumbles. Shares had a big day of Friday, rising nearly 11%, yet still trade at about 5x next year's consensus estimates; it carries a yield of 6%.
AMC Networks Inc. (AMCX) (down 30%), which includes among its entertainment networks AMC, WE tv, SundanceTV and IFC, has struggled due to declining ad revenue. Indeed, the shares are trading at a seven year low. While longer-term prospects may be unclear at this point, the question now is whether short-term market punishment fits the crime. AMCX currently trades at just 4.5x next year's consensus estimates. The company still generates significant free cash flow, to the tune of $7.61 a share over the trailing 12 months. AMC Networks has continued to buy back shares and has reduced share count by nearly 23% over the past four years.
Last but not least is Tenneco Inc. (TEN) (down nearly 52%), which has had a horrendous 2019, in part due to trade and tariff issues. Bad first-quarter results released in May also hurt, but the maker of auto components has beaten expectations the last two quarters. Uncertainty can wreak havoc on a company; look no further than the forward price-to-earnings (P/E) ratio, which stands at less than 3.5. Tenneco carries a lot of debt, to the tune of nearly $5.6 billion.
That wraps up the introduction of the 2019 tax-loss selling portfolio; I will provide periodic updates on its performance.
Here is the 2019 Tax-Loss Selling Portfolio in full:
AMC Networks Inc. AMCX
B&G Foods Inc. (BGS)
Chemours Co. CC
Fluor Corp. (FLR)
GameStop Corp. (GME)
The Gap Inc. (GPS)
Turtle Beach Corp. HEAR
Mosaic Co. (MOS)
Spirit Airlines Inc. (SAVE)
Tenneco Inc. TEN
TripAdvisor Inc. (TRIP)
Tupperware Brands Corp. (TUP)