First, buying the laggards at the end of a calendar year into tax loss selling anticipating a bounce in the New Year is a common hedge fund strategy – a turbo-charged play on the January Effect. Second, any big loser that does not rally once that selling stops is in real trouble.
Here is how the stocks on that list have done in 2020 versus their respective sectors, noting 2 names that were taken out of the S&P 500 before year end 2019.
Better than peer group YTD:
Gap Inc. (GPS): +1.0%, versus -4.6% for the S&P Retail sector
L Brands (LB): +30.1%
Macy's (M): -3.5%
Occidental Petroleum (OXY): +1.7%, versus -10.1% for the S&P Energy Sector
Mylan (MYL): +13.3%, versus +1.2% for the S&P Health Care Sector
Abiomed (ABMD): +9.6%
Worse than peer group YTD:
Mosaic (MOS): -6.4%, versus -2.2% for S&P Materials
Kraft Heinz (KHC): -8.1%, versus +2.0% for the S&P Consumer Staples sector
Alliance Data Systems (ADS): -5.6%, versus +8.8% for the S&P Tech sector