S&P 500   5,062.56 (+1.62%)
DOW   38,883.30 (+0.70%)
QQQ   435.61 (+2.35%)
AAPL   182.97 (+0.36%)
MSFT   411.27 (+2.26%)
META   485.56 (+3.75%)
GOOGL   144.23 (+1.18%)
AMZN   172.54 (+2.34%)
TSLA   193.06 (-0.88%)
NVDA   777.30 (+15.20%)
NIO   5.74 (-3.85%)
AMD   180.03 (+9.58%)
BABA   75.54 (-0.05%)
T   16.62 (-2.24%)
F   12.21 (+0.58%)
MU   85.42 (+4.82%)
CGC   3.44 (+0.00%)
GE   151.22 (+1.44%)
DIS   108.01 (+0.32%)
AMC   4.54 (-0.66%)
PFE   27.23 (-1.59%)
PYPL   57.59 (+0.19%)
XOM   104.44 (-0.39%)
S&P 500   5,062.56 (+1.62%)
DOW   38,883.30 (+0.70%)
QQQ   435.61 (+2.35%)
AAPL   182.97 (+0.36%)
MSFT   411.27 (+2.26%)
META   485.56 (+3.75%)
GOOGL   144.23 (+1.18%)
AMZN   172.54 (+2.34%)
TSLA   193.06 (-0.88%)
NVDA   777.30 (+15.20%)
NIO   5.74 (-3.85%)
AMD   180.03 (+9.58%)
BABA   75.54 (-0.05%)
T   16.62 (-2.24%)
F   12.21 (+0.58%)
MU   85.42 (+4.82%)
CGC   3.44 (+0.00%)
GE   151.22 (+1.44%)
DIS   108.01 (+0.32%)
AMC   4.54 (-0.66%)
PFE   27.23 (-1.59%)
PYPL   57.59 (+0.19%)
XOM   104.44 (-0.39%)
S&P 500   5,062.56 (+1.62%)
DOW   38,883.30 (+0.70%)
QQQ   435.61 (+2.35%)
AAPL   182.97 (+0.36%)
MSFT   411.27 (+2.26%)
META   485.56 (+3.75%)
GOOGL   144.23 (+1.18%)
AMZN   172.54 (+2.34%)
TSLA   193.06 (-0.88%)
NVDA   777.30 (+15.20%)
NIO   5.74 (-3.85%)
AMD   180.03 (+9.58%)
BABA   75.54 (-0.05%)
T   16.62 (-2.24%)
F   12.21 (+0.58%)
MU   85.42 (+4.82%)
CGC   3.44 (+0.00%)
GE   151.22 (+1.44%)
DIS   108.01 (+0.32%)
AMC   4.54 (-0.66%)
PFE   27.23 (-1.59%)
PYPL   57.59 (+0.19%)
XOM   104.44 (-0.39%)
S&P 500   5,062.56 (+1.62%)
DOW   38,883.30 (+0.70%)
QQQ   435.61 (+2.35%)
AAPL   182.97 (+0.36%)
MSFT   411.27 (+2.26%)
META   485.56 (+3.75%)
GOOGL   144.23 (+1.18%)
AMZN   172.54 (+2.34%)
TSLA   193.06 (-0.88%)
NVDA   777.30 (+15.20%)
NIO   5.74 (-3.85%)
AMD   180.03 (+9.58%)
BABA   75.54 (-0.05%)
T   16.62 (-2.24%)
F   12.21 (+0.58%)
MU   85.42 (+4.82%)
CGC   3.44 (+0.00%)
GE   151.22 (+1.44%)
DIS   108.01 (+0.32%)
AMC   4.54 (-0.66%)
PFE   27.23 (-1.59%)
PYPL   57.59 (+0.19%)
XOM   104.44 (-0.39%)

3 more tax-loss selling buy opportunities

graphic of stock prices with words tax loss harvesting

Key Points

  • GelFlex mattress maker Purple Innovations stock is down 80% year-to-date (YTD).
  • Automobile aftermarket parts platform CarParts.com stock is down 45% YTD.
  • American Well Co. is a telehealth platform trading down 58% YTD.
  • 5 stocks we like better than Purple Innovation

Tax-loss selling occurs as investors dump their underperforming stocks to take the capital loss and wait 30 days to buy them back to avoid the wash rule. This causes underperforming stocks to fall in December and bounce back in January and February as investors buy back into the same shares. The weak performance and fundamentals make these stocks higher risk investments, but double-digit bounces are not uncommon, especially with lower-price stocks. Here are three more tax-loss selling buy opportunities for risk-tolerant investors and speculators to consider. These stocks fall into the Retail, Auto/Tires/Trucks, and Medical sectors.

Purple Innovation Inc. NASDAQ: PRPL

Often referred to as Purple, this sleep technology company uses its GelFlex Grid technology to make the "World's First No Pressure Mattress ."They also sell sleep accessories, including pillows, cushions and various other products. The seat cushions and mattresses are colored Purple. The soft but firm squishy waffle-like gel holds its shape, providing solid support and pressure relief with breathability. Some of its Purple mattresses have additional technological innovations like temperature control and adjustable comfort zones. The retail stores are located in shopping malls, competing with mattress manufacturers Tempur Sealy International Inc. NYSE: TPX and Sleep Number Co. NASDAQ: SNBR.

PRPL shares are down 80% year-to-date (YTD). The company has implemented its Path to Premium Sleep strategy, which launched the Sleep Better Live Purple marketing campaign in the quarter, resulting in 22% more search traffic.  


Falling by the wayside

Purple reported its Q3 2023 results on November 9, 2023. The company reported an adjusted net loss of 18 cents or $19.4 million, compared to a profit of $2.5 million in the year-ago period. Net revenues fell 2% YoY to $140 million but increased 18.8% sequentially. Direct-to-consumer revenues fell 5.2% compared to an increase of 17.8% in the year-ago period. Gross margins fell to 33.8% compared to 41.3% in the year-ago period. The company closed the quarter with $26.6 million in cash and cash equivalents. Check out the sector heatmap on MarketBeat.

Seeing the empty glass as half full

Purple CEO Rob DeMartini was optimistic in his comments, "Our third quarter top-line performance demonstrates that our Path to Premium Sleep strategy is gaining traction." He continued, "Since launching our innovative new mattresses and enhanced brand campaign in May and converting the majority of our retail partner floor sets to our new premium and luxury collections over the past several months, we've seen a steady improvement in demand for Purple mattresses despite ongoing industry softness." He noted that one-time costs associated with its new product transition, including its Luxe line of premium mattresses, have pressured the bottom line.

Purple Innovation analyst ratings and price targets are at MarketBeat. Shopify peers and competitor stocks can be found with the MarketBeat stock screener.

purple stock daily msh gap-fill

Daily MSH gap-fill

The daily candlestick chart for PRPL illustrates a market structure high (MSH) breakdown triggered under $1.03 with a potential downside gap fill. PRPL rallied from its Q3 2023 earnings from 54 cents on November 10, 2023, to a high of $1.39 on December 6, 2023. The daily market structure low (MSL) buy triggered the breakout through 67 cents. The daily relative strength index (RSI) is falling to the 50-band. Pullback support levels are at 79 cents, 54 cents, 48 cents and 38 cents.

CarParts.com Inc. NASDAQ: PRTS

The name of the company says it all. CarParts.com is a leading aftermarket seller of automobile parts. It's a one-stop shop for vehicle repair and maintenance needs. Everything from interior accessories to brakes, wheels, tools, fuel pumps, catalytic converters and headlights can be found on the site. Users can shop by popular makes and brands. You can select the make, model, year and sub-model, and it will take you to a page with all the available parts and accessories in the blink of an eye.

Highest third-quarter sales 

CarParts.com reported a loss of 4 cents, beating analyst estimates by 2 cents for its third quarter of 2023. Revenues rose 1% YoY to $167 million, marking the highest third-quarter sales in company history. Gross profits fell 2% to $54.8 million. Net loss was $2.5 million. Adjusted EBITDA was $3 million compared to $6.3 million in the year-ago period. The company bought back 245,000 shares for $1.1 million in the quarter. The company closed the quarter with $66.7 million in cash with no revolver debt.

CarParts.com CEO David Meniane commented, "Today we reported our 15th consecutive quarter of year-over-year growth with $167 million in revenue, up 17% on a two-year stack. We generated strong unit growth, and I'm proud of the results despite a softening consumer environment. We believe that as consumer confidence rebounds, we will be well positioned to support them with the parts and resources they need." The company had 70,000 downloads of its app, generating $2 million in revenues.

CarParts.com analyst ratings and price targets are at MarketBeat.

American Well Co. NASDAQ: AMWL

Telehealth platform provider American Well Co. connects providers and patients, enabling virtual consultations and remote patient monitoring. It also provides billing, scheduling, and administrative tools to support telehealth operations for healthcare organizations. The Amwell Platform enables healthcare service providers to deliver services remotely. Amwell's clients include health systems, insurers and medical providers. The company competes with other platforms, including Teladoc Health Inc. (TDOC). The company is migrating clients to its new Converge platform. The company generates revenues from subscriptions and visit fees. The company received a new opportunity with the United States Defense Health Agency's First initiatives across the Military Health System.

Hemorrhaging cash  

Amwell continues to bleed money, reporting a loss of 48 cents per share in Q3 2023. Net loss was 137.1 million, compared to $93.5 million in Q2 2023. Net loss reflects non-cash goodwill impairment charges of $78.9 million in Q4 and $27.3 million in Q2 2023. Adjusted EBITDA was negative $38.5 million, an improvement compared to negative $45.3 million in the year-ago period.

Revenues fell 10.5% to 61.92 million versus $63.19 million analyst estimates. Subscription revenue was $28.4 million, and Amwell Medical Group (AMG) visit revenue was $26.7 million. Gross margins were 35%. Total visits were 1.4 million in the quarter. Converge visits grew to 50% of total visits, up from 43% sequentially.

Cash and flat forecast

The platform has 104,000 total medical providers. The company closed with $418.1 million in cash and short-term securities. Full-year 2023 revenues are expected between $257 million to $263 million versus $259.63 consensus analyst estimates. AMG visits are expected to be between 1.525 million and $1.575 million.

$180 million DHA contract

Amwell CEO Ido Schoenberg commented, "With the Leidos partnership, Amwell was selected to power a multiyear transformation as part of DHA's digital-first initiative. This award followed a rigorous data-driven evaluation process, and our converged solution emerged as uniquely qualified."

He continued, "The award demonstrates our market leadership position is an enabling digital transformation partner. It also extends our TAM, expanding our reach into the government and public sectors." The contract is expected to generate up to $180 million. After the initial phase, the enterprise rollout will make the U.S. government one of its largest customers with "very substantial" weight in recurring software revenue.

American Well Co. analyst ratings and price targets are at MarketBeat.

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Should you invest $1,000 in Purple Innovation right now?

Before you consider Purple Innovation, you'll want to hear this.

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While Purple Innovation currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Purple Innovation (PRPL)
2.7911 of 5 stars
$1.36+1.1%N/A-0.79Hold$4.00
CarParts.com (PRTS)
3.0207 of 5 stars
$2.55flatN/A-18.21Buy$6.67
American Well (AMWL)
3.5165 of 5 stars
$1.16+0.4%N/A-0.48Hold$3.63
Tempur Sealy International (TPX)
4.2076 of 5 stars
$51.11+2.2%1.02%24.69Buy$55.50
Sleep Number (SNBR)
2.1811 of 5 stars
$11.62+1.4%N/A58.10Hold$22.33
Teladoc Health (TDOC)
3.4909 of 5 stars
$15.26-2.4%N/A-11.39Hold$25.25
Compare These Stocks  Add These Stocks to My Watchlist 

Jea Yu

About Jea Yu

  • JeaYu21@gmail.com

Contributing Author

Trading Strategies

Experience

Jea Yu has been a contributing writer for MarketBeat since 2018.

Areas of Expertise

Equities, options, ETFs and futures; fundamental, qualitative, quantitative and technical analysis and pattern identification; active and swing trading; trading systems and methodology development

Education

Bachelor of Arts, University of Maryland, College Park

Past Experience

U.S. equity markets trader, writer and analyst for over 25 years. Published four books by publishers McGraw-Hill, John Wiley & Sons, Marketplace Books and Bloomberg Press. Speaker at various expos and seminars and has been quoted and featured in USA Today, The Wall Street Journal, Traders Magazine, The Financial Times and various trade publications, including Stocks & Commodities, Active Trader and Online Investor.


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