Here’s How to Trade Canadian Stocks Hit by Tax Loss Selling

(Bloomberg) -- ’Tis the season, for investors to look at stocks that may have gotten crushed by tax-loss selling.

The Canadian S&P TSX is down more than 6% year-to-date and has created opportunities for investors to consider several stocks that have probably been hit by tax-loss selling, according to Canaccord Genuity’s Canadian Research team.

Here’s How to Trade Canadian Stocks Hit by Tax Loss Selling

The companies on the list are mainly energy and materials stocks, since the main sectors contributing to the year-to-date decline in the TSX range from materials and energy to consumer discretionary and financials.

READ: Canadian Stocks a ‘Huge Contrarian Buy,’ BMO’s Belski Says

The List

The complete list of Canadian stocks with potential opportunity due to tax-loss related selling, based on their year-to-date underperformance:

  • Maxar Technologies, -70%
  • Real Matters, -66%
  • Crew Energy, -62%
  • Crescent Point Energy, -48%
  • Turquoise Hill Resources, -41%
  • Hudbay Minerals, -40%
  • Ivanhoe Mines, -38%
  • Dollarama, -33%
  • CI Financial, -33%
  • Baytex Energy, -31%
  • Bird Construction, -31%
  • Stuart Olson, -28%
  • Cogeco Communications, -26%
  • Goldcorp, -22%
  • Canadian Natural Resources, -21%
  • Manulife Financial, -16%
  • Kinaxis, -12%

The Switch Trades

Canaccord also highlights 2 switch trades that have emerged from tax-loss selling. The team recommends switching to Secure Energy Services (down 35 percent year-to-date) from Calfrac Energy (fell 7 percent year-to-date). Another potential switch trade is out of Pembina Pipeline (down 2 percent year-to-date) and in to AltaGas (down 45 percent year-to-date).

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