The TSX-listed Canadian stocks we’ve uncovered are down over the past week and year to date and could be exhibiting signs of tax-loss selling
SmallCapPower | December 12, 2019: Tax-loss selling occurs when investors sell shares at a loss typically in December to reduce the capital gain taxes earned on investments. However, the investor cannot repurchase the shares for a minimum of 30 days to be able to claim the tax deduction, which is why most tax-loss selling occurs in November and December. Tax selling typically involves company shares that incurred huge losses during the year but have decent prospects going forward. After the selling season ends, shares become oversold have an opportunity to bounce back. A good strategy for investors to take advantage of tax-loss selling, then, would be to buy during the tax-selling period and sell after the tax loss has been established for a quick profit. Or if the investor is interested in establishing a long position, the investor could use tax-loss selling as a good entry point. Today we’ve sifted through and found four TSX-listed Canadian stocks that are down over the past week and YTD on above average volume and could be exhibiting signs of tax-loss selling.
*Share prices as at December 10, 2019, data obtained from S&P Capital IQ
DHX Media Ltd. (TSX:DHX) – $1.47
Entertainment and Media
DHX Media is a leading supplier, distributor and licensor of television and film productions for satellite and cable broadcaster globally. The Company focuses on children’s, youth, and family productions; offers animation programs; and provides production services. DHX also sells broadcast rights, content packages, programs, and reuses rights to broadcasters. Following the recent acquisition of Cookie Jar, DHX now has one of the largest independent libraries of children’s TV content globally. DHX has 50-day and 200-day moving averages of $1.83 and $1.90 and is currently ~25% below this support.
- Market Cap: $251.3M
- Weekly Return: -11.2%
- 3-Month Return: -14.3%
- YTD-Return: -36.2%
- 7-Day Average Trading Volume: 191,580
- 90-Day Average Trading Volume: 176,140`
Transcontinental Inc. (TSX:TCL.A) – $12.90
Commercial Services and Supplies
Transcontinental provides printing and publishing and marketing services. The Company is the largest printer in Canada and the fourth-largest in North America. Transcontinental has three main business segments: Packaging, Printing, and Media. On November 27, 2019, TCL announced the divesture of its Paper and woven polypropylene packaging operations to Hood Packing Corporation for $239M. The segment generated ~ $285M in revenue for F2019 with estimated EBITDA margins were 8-9%, implying a 9-10x EV/EBITDA takeout multiple. Transcontinental has 50-day and 200-day moving averages of $14.91 and $15.35 and is currently ~15% below this support. Additionally, the Company pays a $0.22 quarterly dividend per share, which implies an attractive dividend yield of 7%.
- Market Cap: $1,132.3M
- Weekly Return: -9.9%
- 3-Month Return: -15.2%
- YTD-Return: -32.9%
- 7-Day Average Trading Volume: 365,770
- 90-Day Average Trading Volume: 201,830
Corby Spirit and Wine Limited (TSX:CSW.A) – $15.40
Alcoholic Beverages
Corby Spirit and Wine Limited manufactures, markets, and imports spirits and wines. The Company’s portfolio of owned beverage alcohol brands includes: J.P. Wiser’s Canadian Whisky, Lamb’s rum, Polar Ice vodka, Ungava Spirits, Foreign Affair, and McGuinness liqueurs; and non-owned beverage alcohol brands comprise the ABSOLUT vodka, Chivas Regal, The Glenlivet and Ballantine’s scotches, Jameson Irish whiskey, Beefeater gin, Malibu rum, Kahlúa liqueur, and Mumm Champagne, as well as Jacob’s Creek, Stoneleigh, Campo Viejo, and Wyndham Estate wines. Corby sells its products to provincial liquor boards and customers in Canada and globally. Corby Spirt and Wine has 50-day and 200-day moving averages of $16.07 and $17.44 and is currently ~8% below this support. The Company also pays a $0.22 quarterly dividend per share, which implies solid dividend yield of 6%.
- Market Cap: $436.0M
- Weekly Return: -3.6%
- 3-Month Return: -13.1%
- YTD-Return: -18.1%
- 7-Day Average Trading Volume: 26,920
- 90-Day Average Trading Volume: 14,820
Lassonde Industries Inc. (TSX:LAS.A) – $156.10
Food Packaging Products
Lassonde Industries manufactures various ready-to-drink fruit and vegetable juices and drinks in Canada, the U.S., and globally. The Company sells its products in various packages under various trademarks, most notably the Fruité, Tropical Grove, Allen’s, Del Monte, and Oasis brands. Lassonde products end up in supermarkets, independent grocers, hotels, hospitals, and schools. On November 15, 2019, the Company announced that it has launched an Oasis juice carton with a paper straw, making it the first company to do so in North America. Lassonde has 50-day and 200-day moving averages of $168.68 and $177.82 and is currently ~9% below this support. The Company also pays a $0.60 quarterly dividend per share, implying a dividend yield of 2%.
- Market Cap: $1,082.3M
- Weekly Return: -0.7%
- 3-Month Return: -11.2%
- YTD-Return: -21.2%
- 7-Day Average Trading Volume: 4,050
- 90-Day Average Trading Volume: 2,500
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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