Stocks in the $10-50 range offer a sweet spot between affordability and stability as they’re typically more established than penny stocks. But their headline prices don’t guarantee quality, and investors should exercise caution as some have shaky business models.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. That said, here are three stocks under $50 to avoid and some other investments you should consider instead.
Kohl's (KSS)
Share Price: $11.37
Founded as a corner grocery store in Milwaukee, Wisconsin, Kohl’s (NYSE: KSS) is a department store chain that sells clothing, cosmetics, electronics, and home goods.
Why Is KSS Risky?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Projected sales decline of 4.7% over the next 12 months indicates demand will continue deteriorating
- 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
At $11.37 per share, Kohl's trades at 6.3x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than KSS.
Harley-Davidson (HOG)
Share Price: $26.40
Founded in 1903, Harley-Davidson (NYSE: HOG) is an American motorcycle manufacturer known for its heavyweight motorcycles designed for cruising on highways.
Why Are We Wary of HOG?
- Demand for its offerings was relatively low as its number of motorcycles sold has underwhelmed
- Eroding returns on capital suggest its historical profit centers are aging
- High net-debt-to-EBITDA ratio of 10× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Harley-Davidson’s stock price of $26.40 implies a valuation ratio of 6.5x forward price-to-earnings. To fully understand why you should be careful with HOG, check out our full research report (it’s free).
Bausch + Lomb (BLCO)
Share Price: $15.22
Founded in 1853, Bausch + Lomb (NYSE: BLCO) is a global healthcare company specializing in eye health products, including contact lenses, lens care products, surgical instruments, and pharmaceuticals for ocular conditions.
Why Does BLCO Fall Short?
- Annual revenue growth of 5% over the last five years was below our standards for the healthcare sector
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 23.5% annually
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Bausch + Lomb is trading at $15.22 per share, or 20.6x forward price-to-earnings. If you’re considering BLCO for your portfolio, see our FREE research report to learn more.
Stocks We Like More
With rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle.
Put yourself in the driver’s seat by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
