It’s the end of the year, which means it is “tax loss harvesting” time.
Specifically, investors sell losing positions to offset capital gains taxes from stocks they sold that earned them a profit. By selling stocks at a loss, investors offset the capital gains tax they owe on the year’s earned profits.
Essentially, it’s a strategy that helps investors reduce the amount of taxes they owe to the Internal Revenue Service (IRS). While helpful, tax loss harvesting also provides a great excuse to expunge the stocks that have been hurting a portfolio. Cleaning up one’s stock holdings is a good exercise to undertake at the end of year.
Out with the old and in with the new, as the saying goes. Let’s delve into three useless stocks to sell in 2023 to reduce your taxes in 2024.
Walgreens Boots Alliance (WBA)
In October, veteran healthcare executive Tim Wentworth was named the new CEO of Walgreens Boots Alliance (NASDAQ:WBA). He brings to the retail drugstore chain a mission to turn around its fortunes.
Wentworth’s appointment comes not a moment too soon given that WBA stock is down 37% in 2023. In fact, it decreased 70% in the past five years. The company continues to pivot to become a provider of healthcare services as well as a retail pharmacy chain. So far, the transition hasn’t gone well.
In the past few years, Walgreens took a majority stake in primary care provider VillageMD and acquired specialty pharmacy provider Shields Health. Additionally, they bought homecare provider CareCentrix. Integrating all of these businesses has hurt Walgreens’ earnings and caused internal strife at the company. Also, Walgreens witnessed its revenue decline due to a fall in demand for Covid-19 vaccines and tests. The company has posted a string of financial results that missed Wall Street targets, pushing WBA stock lower.
Wentworth was the former CEO of privately held pharmacy benefits management company Express Scripts. Clearly, he has his work cut cut for him at Walgreens.
Dollar General (DG)
Speaking of new leadership, hope arrives at Dollar General (NYSE:DG). Former CEO Todd Vasos has come out of retirement to once again lead the discount retailer.
Most recent CEO Jeff Owen resigned from the top job abruptly and without notice after less than a year. This paved the way for Vasos to triumphantly return. The latter previously led Dollar General from 2015 through 2022. Unfortunately, he has work ahead of him given that DG stock is down 50% this year.
Further, the past year has been a painful one for Dollar General. A series of subpar financial results has pushed DG stock lower and lower. The company has blamed the poor showing on a decline in consumer spending as inflation has remained elevated. Also, DG claimed that shoplifting at its retail outlets has worsened. Notably, Dollar General has invested $150 million on higher wages, store remodelings, and supply chain improvements. So far, that investment has yet to yield many results.
DISH Network (DISH)
One of the worst performing stocks is DISH Network (NASDAQ:DISH), the satellite TV and wireless internet provider. In fact, its stock plunged 68% this year, making it one of the worst performers of 2023.
In the summer, the stock was removed from the benchmark S&P 500 index. Over five years, DISH stock has declined 85%. Today, the share price is below $5, making DISH Network a penny stock. A decade ago, the stock was trading at just under $80 a share.
The long, slow decline is the result of rising competition from streaming services and internet service providers, as well as growing subscriber losses. The company has reported successive quarters of earnings misses that has soured investors. While management has announced a turnaround plan, there’s no evidence yet of any success. Recently, the company announced a surprise loss of 26 cents a share compared to a 65-cent profit a year earlier. Revenue in the latest quarter fell 10% year over year (YOY) to $3.7 billion.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
