BofA: 13 Stocks to Buy for a Tax-Loss Harvesting Haul

A BofA Securities note identifies 13 stock picks that might be temporarily hampered by tax-loss harvesting but are fundamentally sound and could outperform in the coming months.

A harvester
(Image credit: Getty Images)

Tax-loss harvesting season is upon us once again – that depressing time of year when investors must face the worst of their stock-picking blunders.

Although kicking losing positions out of a portfolio to salvage a tax break is no one's idea of fun, it doesn't have to be all doom and gloom. Indeed, BofA Securities has actually found a way to turn tax-loss harvesting season into an opportunity for tactical stock picking glory.

It just so happens that tax-loss harvesting season can be a great time to pick up year-to-date losers on the cheap – then reap outsized rewards in the months ahead, says the U.S. Equity & Quant Strategy team at BofA.

The strategists found that since 1986, S&P 500 stocks that were down more than 10% in the first 10 months of the year – also known as Tax-Loss Harvesting Candidates (TLCs) – went on to rise by an average of 5.6% from Nov. 1 through Jan. 31.

"That's 1.7 percentage points higher than the S&P 500's average return of 3.9% over the same period, with a hit rate of 69%," write strategists Savita Subramanian, Jill Carey Hall and Shuwen Wang. In other words, TLCs have outperformed the broader market essentially 70% of the time over the three months following Halloween.

With that data in hand, the Equity & Quant Strategy team screened the S&P 500 for TLCs that are Buy-rated by BofA Securities equity analysts. The process served up 13 year-to-date losers that the team believes are poised to beat the market in the months ahead. We then dove into what the rest of Wall Street says about BofA's 13 picks, checking analysts' consensus recommendations, price targets, individual research and other data.

Read on for a comprehensive look at BofA Securities' 13 stocks to buy for a potential tax-loss harvesting windfall.

Share prices and other data are as of Oct. 26, courtesy of S&P Global Market Intelligence and YCharts, unless otherwise noted. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.


A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.


Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.


In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics and more.


Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.


Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.