It’s tax loss bargain hunting season, and the Canadian Imperial Bank of Commerce stock research team has a few dozen ideas.
Selling underperforming investments at a loss – thus allowing investors to offset taxes on their capital gains – typically occurs between late November and mid-December. Subsequently, “bargain hunters may use the weakness as an opportunity to find candidates who are trading near their 52-week lows,” said Sid Mokhtari, CIBC chief market technician, in a report. research published Sunday.
The report highlights 52 TSX-listed companies that could be good candidates for tax-loss sale and redemption that investors should consider before December 29, which is the last trading day of 2021 to register transactions. capital gains or losses. For those with a particular interest in large corporations, CIBC recommends consulting Barrick Gold Corp. (ABX), Wheaton Precious Metals Corp. (WPM), cheese maker Saputo Inc. (SAP) and cannabis producer Canopy Growth Corp. (WEED).
More than half of the companies on CIBC’s list are mining companies (30 of 52) and gold companies in particular make up the majority of them. CIBC also recommends other cannabis companies such as Tilray Inc. (TLRY), Village Farms International Inc. (VFF), Aurora Cannabis Inc. (ACB) and Cronos Group Inc. (CRON). The Toronto Stock Exchange’s healthcare subgroup, which is largely made up of marijuana growers, is the worst performing this year, with a negative return of 23% at midday Monday.
Several renewable energy companies, such as TransAlta Renewables Inc. (RNW), Ballard Power Systems Inc. (BLDP) and Brookfield Renewable Energy Partners LP (BEP-U) were also on the list.
Over the past 15 years, the CIBC report said that qualified baskets of tax-loss candidates have shown positive returns during the so-called “January effect” when investors “take back battered stocks that have a negative impact. best foundational support while trading near their 52 week mark. low. These stocks, according to the report, posted average positive returns of 4.4 percent between Dec. 15 and Jan. 15 and outperformed the TSX as a whole by nearly three percentage points.