The worst of the stock market’s laggards this year could rebound to start 2025, according to Wolfe Research. As the year winds down, so does investors’ practice of dumping their biggest losers late in the year to realize capital losses and then use them to offset capital gains and save on taxes. This move is known as tax-loss harvesting . The names that saw the sharpest declines in 2024 could jump to start the year, according to Chris Senyek, chief investment strategist at Wolfe. “There are long documented market anomalies occurring during the month of January, including the post-December ‘bounce’ of the prior year’s worst performing stocks,” he said in a recent report. Senyek found that the worst-performing stocks outperformed by roughly 2.5 percentage points on average from the last two weeks of December through January. But the rebound tends to be short-lived, the firm found. “During February and March, the stock price performance of prior year’s worst performing stocks reversed itself, many times going on to underperform for the entire year,” Senyek added. His team turned up a list of sizable 2024 losers in the S & P 500 that could see a fleeting jump in the new year. Losers that could see a brief bounce Dollar General made it on to Wolfe’s list. Shares are off nearly 44% in 2024. Earlier this month, the discount store trimmed its outlook for the year ending Jan. 31, calling for earnings to range from $5.50 to $5.90 per share, compared to earlier guidance of $5.50 to $6.20 per share. It also narrowed its range for net sales growth in the period, calling for a year-over-year increase of 4.8% to 5.1%, compared to earlier guidance of 4.7% to 5.3%. Shares of Dollar General and its competitor Dollar Tree have also suffered this year as low-income customers’ wallets felt the squeeze from inflation. Bank of America recently dialed back its EPS estimates on Dollar General for the 2026 fiscal year to $6.15 from $6.90, citing 2025 expense pressures, including the return of incentive compensation and wage rate increases. However, the bank also double raised its investment rating to buy from underperform as analyst Robert Ohmes said there are “multiple early signs of DG’s ‘Back to Basics’ strategy working.” “Increasing visibility on strategic initiatives and [market] share gains from competitor store closures provide a favorable setup for comp [sales] & profitability improvement into 2025, particularly in 2H,” he said. Intel has suffered a tumultous year, seeing its shares slide more than 60% as the once iconic semiconductor maker struggled to catch the artificial intelligence wave. Indeed, Nvidia replaced Intel in the Dow Jones Industrial Average in November . Intel has been in the midst of a restructuring effort , trimming costs and lowering headcount. The company also said that it plans to turn its foundry business into a subsidiary. CEO Pat Gelsinger abruptly left the company at the start of December, ending a nearly four years at the helm. “Intel experienced a horrendous 2024, with shares down 60% YTD and the worst performer in our coverage by far,” wrote Cantor Fitzgerald analyst C.J. Muse in a report earlier this week, noting that the company “faces tremendous challenges with respect to its strategy for FoundryCo.” “Put it all together, and we see no quick fix to Intel’s problems, leading us to remain on the sidelines,” the analyst added. Other names that are on Wolfe’s list of bounceback candidates include Dexcom , Estee Lauder and Enphase Energy .
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#big #losers #rebound #early #year #Wolfe