While 2012 has been friendly for stocks (much friendlier than it feels, as the S&P 500 is up in price by 12.4% and the Russell 2000 by 11.2%), it hasn't been a great year for all stocks. This is the time of year when many investors like to sift through the poorly performing stocks of the year, anticipating that there might be some bargains due to tax-loss related selling as well as window-dressing.
Most readers probably understand the dynamic of selling to book losses, but let me make sure that I am clear about this possibly more powerful second factor. Many institutions are embarrassed to show their mistakes, so they prune their portfolios of losers and hang onto winners for year-end. Both of these behaviors pressure losing stocks, but smart investors have figured this out over the years, with many employing a strategy to scoop up bargains in December (like Christmas sales).
I have shared a few screens designed to hone in on this type of activity, most recently discussing eight beaten-up stocks starting to bounceearlier this month. Several of those stocks have continued to bounce. Today, though, I want to see if some of the walking wounded that aren't yet participating in any sort of bounce yet may be of appeal. With this in mind, I ran the following screen using Baseline on all stocks in the Russell 3000 with market caps in excess of $500mm:
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