Wolfe Research says the stock market’s worst performers this year could start to rebound in 2025. As the end of the year approaches, so too will the practice of investors selling off their biggest loss-making businesses at the end of the year to realize capital losses and then using them to offset capital gains and save taxes. This measure is known as tax loss harvesting. Chris Senyek, chief investment strategist at Wolfe, said stocks with the biggest declines in 2024 are likely to rise sharply at the start of the year. “January saw long-documented market anomalies, including last year’s worst-performing stocks ‘rebounding’ after December,” he said in a recent report. Senyek found that from the last two weeks of December through January, The worst-performing stocks outperformed the market by about 2.5 percentage points on average. But the company found that rebounds were often short-lived. “During February and March, the stock price performance of last year’s worst-performing stocks reversed course, and in many cases underperformed the entire year,” added Senyek, whose team created a list of S&P 500 stocks that will fall sharply in 2024. , these stocks may see a brief rise in the new year. Dollar General, a loser that could post a brief rebound, makes Wolf’s list. Shares are down nearly 44% in 2024. to $6.20. It also narrowed the range for net sales growth in the period, forecasting annual growth of 4.8% to 5.1%, compared with previous guidance of 4.7% to 5.3%. Shares of Dollar General and rival Dollar Tree have also suffered this year as the wallets of low-income customers have been squeezed by inflation. Bank of America recently lowered its fiscal 2026 earnings per share forecast for Dollar General to $6.15 from $6.90, citing spending pressures in 2025, including the return of incentive pay and wage increases. However, the bank also upgraded its investment rating to buy from underperform, with analyst Robert Ormes saying “there are multiple early signs that DG’s ‘back to basics’ strategy is working.” He said : “Increased visibility of strategic initiatives and (market) share gains from competitor store closures provide favorable conditions for competitive (sales) and profitability improvements in 2025, especially in the second half.” Intel weathers turmoil The once-iconic semiconductor maker’s stock has fallen more than 60% this year as it struggles to catch up on the artificial intelligence wave. In fact, Nvidia took Intel’s spot on the Dow Jones Industrial Average in November. Intel has been restructuring, cutting costs and reducing its headcount. The company also said it plans to convert its foundry business into a subsidiary. Chief Executive Pat Gelsinger abruptly left the company in early December, ending nearly four years at the helm. “Intel has had a horrific 2024, with shares down 60% year-to-date and by far the worst performer in our coverage,” Cantor Fitzgerald analyst CJ Muse wrote in a note earlier this week. He noted that the company “faces huge strategic challenges” for foundries. “Taken together, we don’t think Intel’s issues can be resolved quickly, leading us to remain on the sidelines,” the analyst added. Other companies on Wolf’s rebound shortlist include Dexcom, Estée Lauder and Enphase Energy.
Wolf says these big losers of 2024 could rebound early next year | Real Time Headlines
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