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As the holiday season kicks into full swing and year-end approaches, so does a popularly used investing tactic known as tax-loss harvesting. The phenomenon, typically occurring toward the end of a calendar year, refers to selling an investment at a loss to offset realized capital gains elsewhere in the portfolio and reduce taxes. 2023 has been a strong year for the market — and technology stocks in particular. But not every sector is poised for big gains. Within the S & P 500 , utilities, consumer staples, energy and health-care stocks are all on track to finish the year with losses. Given this setup, CNBC Pro used its stock screener tool to find names that could be rebound candidates even though they’re facing pressure from tax-loss selling. We looked for stocks that lost 20% or more year to date through the third quarter and are up at least 5% in the fourth quarter. The names are also loved by analysts, with at least 51% having a buy rating and the average price target implying 10% upside or more. Here are the five companies that meet the criteria: Insulet has seen the strongest fourth-quarter performance of the group thus far, with shares up nearly 19% after a 35% slump year to date through the third quarter. About 63% of analysts hold a buy rating on the maker of diabetes technology, with the average price target implying more than 15% upside. Morgan Stanley upgraded Insulet to overweight from equal weight on Monday, hiking its price target to $234 from $185 per share. “For PODD, we think GLP-1 fears are especially overdone, with the stock down > 40% despite strong numbers,” wrote analyst Patrick Wood, referring to Insulet’s decline in light of the growing popularity of drugs that treat diabetes and obesity. CPAP device maker ResMed also made the cut. Shares slumped nearly 23% this year through the third quarter but have added about 9% in the current quarter. The average price target suggests shares have another 17% upside ahead. In late October, Morgan Stanley boosted its rating on ResMed to overweight from equal weight. Analyst Sean Laaman said the company can still grow even as GLP-1 medications proliferate. “Under our scenarios, we see CPAP patients potentially lost to GLP-1s as falling within scope of being at least somewhat offset by the expanding ‘obesity funnel,'” he wrote. Sunrun offers the greatest upside potential of the group, with the average price target suggesting shares could gain another nearly 45%. This year through the third quarter, shares plummeted 42%, rallying about 11% since the beginning of the fourth quarter. Utilities stocks AES Corp and Clearway Energy rounded out the list. – CNBC’s Michael Bloom contributed reporting.
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