KEY POINTS
- Australia's financial year ends on 30 June. Investors sell their losing stocks to cut their tax bill, and this peaks in the last few days, pushing weak shares even lower than they are worth.
- This year's losers sit in healthcare and a few big stumbles, not lithium or uranium, which both rose. The healthcare index even fell about 6.5% in one day in May after CSL's downgrade.
- The five most exposed names: DroneShield, IperionX, HUB24, CSL and Treasury Wine Estates.
- Our view: CSL looks like the best bargain, IperionX could bounce but is high-risk, while Treasury Wine and HUB24 look more like value traps.
The stocks most at risk of being sold before 30 June are this year’s biggest losers, so the question is simple: sell with the crowd, or buy the names that fall too far? Some jump back in July once the selling stops, while others keep falling because something is truly wrong. Telling the two apart is the whole job.
Why does tax-loss selling hit hardest in late June?
When you sell a stock at a loss, that loss lowers the tax you pay on gains made elsewhere. With the year ending on 30 June, investors rush to lock in those losses in the stocks already down the most. That heavy selling can push a beaten-down share below its real worth, where bargains can show up.
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- INSIDER CONVICTION TRADES FY26
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Which 5 ASX stocks are most exposed for 2026?
DroneShield (ASX:DRO) closed Friday at A$2.28, down about 27% over the month and roughly 5% over the year, with an ASIC probe hanging over it. Yet sales are still growing. The dip may go too far, but the probe caps it until it clears.
IperionX (ASX:IPX) closed at A$3.65, down about 34% over the month and 20% over the year. This US-focused titanium developer is still loss-making, but it is now technically oversold, so a short-term bounce is possible for risk-tolerant investors.
HUB24 (ASX:HUB) closed at A$69.89, down about 18% over the month and 19% over the year. The investment platform was caught in Friday’s sell-off in financial stocks after Judo Capital’s profit warning. The fall looks sentiment-driven, but the weakness may linger.
CSL (ASX:CSL) is the biggest healthcare loser, with shares more than halved over the past year. In May, it cut its FY26 revenue target to about US$15.2 billion and booked a roughly US$5 billion write-down on its Vifor business, briefly falling into the A$90s. A small June bounce has since faded, but this is still a strong business, so it leans towards a bargain.
Treasury Wine Estates (ASX:TWE) pulled its FY26 earnings guidance and paused a A$200 million share buyback on weak Penfolds wine demand in China. The shares are trading near their 52-week low, and the problem looks deep, not just tax-driven. Leaning trap.
Which could bounce back in July?
Tax selling usually fades in early July, and the sound but oversold names recover first. In our view, CSL is the best bounce-back pick, down on short-term issues, not a broken model, with the cash to ride it out. IperionX could bounce sharply after such heavy falls, but it is still burning cash, so it is suitable only for risk-tolerant investors. Treasury Wine and HUB24 look more like falling knives for now. DroneShield is the wildcard: healthy sales, but stuck until the probe lifts.
The bottom line: tax-loss selling creates real bargains every July, but only in stocks that were sound to begin with. Buy the overshoot, not the broken business.
