Morgan Stanley’s list of tax loss selling stocks

Morgan Stanley analysts published their list of tax loss selling stocks.

These are stocks in the top quintile of “sell” ratings on Jan. 16, as a proxy for stocks that are favored or widely held. Analysts also screen for stocks that saw at least a 10% drop in their price from mid-January through the end of September.

Morgan Stanley chief investment officer Michael J. Wilson said they limit the downside to 25%, since the stocks with the biggest price drops “tend to show something of a rebound in the fourth quarter.”

Wilson also said that the bulk of underperformance, compared to the market – the compared benchmark is the S&P 1500 (NYSEARCA:SPTM) – for the list happens in October.

“In the month of October, our tax loss selling stocks have tended to underperform the market by an average of 178 basis points and underperform sector and industry group peers by 114, and 110 basis points, respectively, with hit rates of about 55%,” he said.

The tax loss selling stocks underperform the average stock in their sector by 137 basis points in the fourth quarter, with a hit rate of 54%; and underperform the average stock in their industry group by 128 basis points in the fourth quarter, with a hit rate of 54%.

Within communication services (XLC)

• Iridium Communications Inc. (IRDM) – Return from mid-Jan through Sept month-end: – 20%

Within consumer discretionary (XLY)

• Aptiv Plc (APTV) – Return from mid-Jan through Sept month-end: -11%
• Standard Motor Products Inc. (SMP) – Return from mid-Jan through Sept month-end: -15%
• XPEL Inc. (XPEL) – Return from mid-Jan through Sept month-end: -16%
• Haverty Furniture Companies Inc. (HVT) – Return from mid-Jan through Sept month-end: -19%
• LKQ Corp. (LKQ) – Return from mid-Jan through Sept month-end: -16%
• Hilton Grand Vacations Inc. (HGV) – Return from mid-Jan through Sept month-end: -12%
• Mister Car Wash Inc. (MCW) – Return from mid-Jan through Sept month-end: -22%

Within consumer staples (XLP)

• Darling Ingredients Inc. (DAR) – Return from mid-Jan through Sept month-end: -17%
• Simply Good Foods Co. (SMPL) – Return from mid-Jan through Sept month-end: -17%

Within energy (XLE)

• Chord Energy Corp. (CHRD) – Return from mid-Jan through Sept month-end: -15%
• Civitas Resources Inc. (CIVI) – Return from mid-Jan through Sept month-end: -21%
• Halliburton Co. (HAL) – Return from mid-Jan through Sept month-end: -13%
• Patterson-UTI Energy Inc. (PTEN) – Return from mid-Jan through Sept month-end: -24%
• Schlumberger Limited (SLB) – Return from mid-Jan through Sept month-end: -13%
• Talos Energy Inc. (TALO) – Return from mid-Jan through Sept month-end: -18%
• Valaris Ltd. (VAL) – Return from mid-Jan through Sept month-end: -15%

Within financials (XLF)

• Global Payments Inc. (GPN) – Return from mid-Jan through Sept month-end: -21%

Within health care (XLV)

• Privia Health Group Inc. (PRVA) – Return from mid-Jan through Sept month-end: -15%
• Simulations Plus Inc. (SLP) – Return from mid-Jan through Sept month-end: -16%
• U.S. Physical Therapy Inc. (USPH) – Return from mid-Jan through Sept month-end: -11%
• Biogen Inc. (BIIB) – Return from mid-Jan through Sept month-end: -21%
• Dynavax Technologies Corp. (DVAX) – Return from mid-Jan through Sept month-end: -21%
• Neurocrine Biosciences Inc. (NBIX) – Return from mid-Jan through Sept month-end: -13%
• Perrigo Co. Plc. (PRGO) – Return from mid-Jan through Sept month-end: -21%
• Repligen Corp. (RGEN) – Return from mid-Jan through Sept month-end: -14%
• West Pharmaceutical Services Inc. (WST) – Return from mid-Jan through Sept month-end: -13%

Within industrials (XLI)

• Alamo Group Inc. (ALG) – Return from mid-Jan through Sept month-end: -12%
• Boeing Co. (BA) – Return from mid-Jan through Sept month-end: -24%
• Gibraltar Industries Inc. (ROCK) – Return from mid-Jan through Sept month-end: -12%
• Insteel Industries Inc. (IIIN) – Return from mid-Jan through Sept month-end: -14%
• NV5 Global Inc. (NVEE) – Return from mid-Jan through Sept month-end: -10%

Information technology (XLK)

• Photronics Inc. (PLAB) – Return from mid-Jan through Sept month-end: -16%
• Adobe Inc. (ADBE) – Return from mid-Jan through Sept month-end: -13%

Materials (XLB)

• Arch Resources Inc. Class A (ARCH) – Return from mid-Jan through Sept month-end: -17%
• Quaker Houghton (KWR) – Return from mid-Jan through Sept month-end: -14%
• Stepan Co. (SCL) – Return from mid-Jan through Sept month-end: -12%

Real estate (XLRE)

• Armada Hoffler Properties Inc. (AHH) – Return from mid-Jan through Sept month-end: -11%
• Host Hotels & Resorts Inc. (HST) – Return from mid-Jan through Sept month-end: -11%