At the end of the year, portfolio managers sell stocks to make sure their annual returns look good. Share prices can suffer as a result. Bill Griffeth spoke with Greg Zuckerman of The Wall Street Journalabout which stocks are ripe for profit taking. He says there’s a profile of the stocks most likely to take a hit.
Watch for companies with a market value above $300 million. Also, these stocks should have PE multiples of more than 15 for the next 12 months and EPS growth below 15% for the next year as well. There should be no insider buying and check for rising short sales both over the past year – and this past month.
Three stocks worthy of mention: Broadcom, Hillenbrand Industries and UGI.