Sell Nuix, AMP, Pushpay before EOFY? Expert weighs in

Considering cutting some of your losers before tax deadline? Here's some advice on 3 stocks that have caused investors to go grey this year.

| More on:
caucasian man in business suit holding sign that reads ask the experts

Image Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Fund managers and stock experts love talking about hot stocks and the ones that are about to blast off.

But what about the stinkers? 

We know not all ASX shares can be winners. Starting and maintaining a successful company is very difficult — otherwise, everyone would do it.

For many investors, the end of the financial year is a time to review their portfolios. They might consider pruning some of the losers or cashing in some of the winners before June 30.

There is a tax benefit to cutting the losers.

Any loss you cop from selling a share for less than what you purchased can be offset against the gains reaped from the winners. This reduces the overall capital gains tax liability for that year.

Three well-known ASX stocks that have disappointed shareholders in the past year were Nuix Ltd (ASX: NXL), AMP Ltd (ASX: AMP) and Pushpay Holdings Ltd (ASX: PPH).

Berman Invest chief investment officer Julia Lee this week indicated whether she would keep or dump each of them ahead of June 30.

AMP just gets worse, but…

AMP shares were trading at $1.18 on Tuesday afternoon, which is 33% lower than 12 months ago. The stock has lost almost 80% of its value in 3 years.

"The only reason you'd be holding onto AMP is because it's up for sale," Lee told SwitzerTV Investing.

"You'd be hoping that AMP Capital gets a good price. AMP is probably worth about $1.50… There is potentially some upside there."

The unfortunate situation for AMP shareholders, according to Lee, is that the company keeps losing value as time passes because customers continue to take their money out.

"The longer this drags on the more painful it gets… but I think for the time being you'd be holding out still hoping for a bid."

Nuix is the worst (no buts)

The software company has been in the headlines this year for all the wrong reasons. 

After a spectacular ASX debut in December, Nuix shares were as high as $11.86 before a series of downgrades and corporate scandals have seen investors flee.

On Tuesday afternoon they were down another 1.7% to trade at $2.60.

With inflation and interest rate fears looming, Lee suggested investors' money could be directed elsewhere — even within the same sector.

"Nuix still looks like it's coming under a bit of pressure," she said.

"If you're investing in the tech space, I'd probably go with the best rather than the worst. And Nuix is the worst at the moment."

Pushpay's market is now 'saturated'

Pushpay produces software that manages donations for charities. The product's major market is among churches in the US.

The shares were trading for $1.66 on Tuesday afternoon, which is more than 18% down in the past year. It's nearly 27% down from its 52-week high.

Lee has serious concerns about the potential clientele left to conquer.

"Pushpay did really well because it was winning these big contracts out in the US. But I think it's [now] really saturated, that giant church market," she said.

"So now you're looking at them having to sign up smaller churches, which, I think, is a more difficult and expensive task to do. The easy-hanging fruit has already been picked here."

Pushpay would be out the door, added Lee, so the money can be deployed to other opportunities.

"It is going to be harder to fund the type of growth they've seen in the past few years."

What are the alternatives?

If you prune these shares from your portfolio, where should the newly freed capital go?

Lee made a couple of suggestions.

"I like G8 Education Ltd (ASX: GEM) because the strength of the jobs market means that more people will be looking for childcare," she said.

"Still looking relatively cheap, around that $1.03 mark."

G8 shares were trading at $1.04 on Tuesday afternoon. They're down 13.75% on the year but have risen 11.29% in the past 12 months.

A less stressful takeover play than AMP, Lee suggested, is finance software maker Iress Ltd (ASX: IRE).

"In terms of the UK it does have leading positions in some of its products," she said.

"Although its major product here in Australia and New Zealand has been declining, there is still some potential there from a technology perspective."

As of Tuesday afternoon, Iress stocks were going for $13.08. That's 22% up this year, and about the same for the past 12 months.

The shares were languishing in the low $10s earlier this month, just before the market found out about a potential buyout.

Motley Fool contributor Tony Yoo has owns shares of PUSHPAY FPO NZX and Nuix Pty Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Nuix Pty Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

Two brokers analysing stocks.
Broker Notes

Goldman Sachs says this ASX 200 stock is a buy with 25%+ upside

Let's see why the broker is bullish on this name right now.

Read more »

Happy man holding Australian dollar notes, representing dividends.
Broker Notes

Why this cheap ASX All Ords stock could rise 50% and pay an 11% dividend yield

Goldman Sachs thinks that big returns could be coming for buyers of this stock.

Read more »

Woman using a pen on a digital stock market chart in an office.
Broker Notes

CSL stock: Buy, hold, or sell in 2025?

Let's see what analysts are saying about this blue chip giant at the start of the year.

Read more »

a woman holds a facebook like thumbs up sign high above her head. She has a very happy smile on her face.
Broker Notes

Goldman Sachs says this ASX 200 stock is a top buy in January

The broker is forecasting some big returns for investors this year.

Read more »

A man working in the stock exchange.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys right now.

Read more »

A group of businesspeople clapping.
Broker Notes

2 of the best ASX 200 shares to buy in the Asia-Pacific

Goldman Sachs is speaking very highly about these stocks this month.

Read more »

Excited group of friends sitting on sofa watching sports on TV and celebrating.
Broker Notes

4 ASX 200 shares just upgraded for 2025 by top brokers

Leading brokers are forecasting strong performance in 2025 from these four ASX 200 companies.

Read more »

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Broker Notes

This beaten down ASX 200 stock could rise 90%

Bell Potter thinks this stock could be dirt cheap after a recent selloff.

Read more »