Stocks under $10 pique our interest because they have room to grow (as well as the most affordable option contract premiums). That doesn’t mean they’re bargains though, and we urge investors to be careful as many have risky business models.
The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. Keeping that in mind, here are three stocks under $10 to swipe left on and some alternatives you should look into instead.
ThredUp (TDUP)
Share Price: $2.45
Founded to revolutionize thrifting, ThredUp (NASDAQ: TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.
Why Should You Sell TDUP?
- Demand for its offerings was relatively low as its number of orders has underwhelmed
- Historical operating losses point to an inefficient cost structure
- Negative free cash flow raises questions about the return timeline for its investments
At $2.45 per share, ThredUp trades at 35x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including TDUP in your portfolio.
Leggett & Platt (LEG)
Share Price: $8.33
Founded in 1883, Leggett & Platt (NYSE: LEG) is a diversified manufacturer of products and components for various industries.
Why Do We Pass on LEG?
- Products and services aren't resonating with the market as its revenue declined by 1.6% annually over the last five years
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Leggett & Platt is trading at $8.33 per share, or 6.9x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than LEG.
NN (NNBR)
Share Price: $2.63
Formerly known as Nuturn, NN (NASDAQ: NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.
Why Are We Out on NNBR?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Sales over the last five years were less profitable as its earnings per share fell by 17.1% annually while its revenue was flat
- Cash burn makes us question whether it can achieve sustainable long-term growth
NN’s stock price of $2.63 implies a valuation ratio of 2.4x forward EV-to-EBITDA. If you’re considering NNBR for your portfolio, see our FREE research report to learn more.
Stocks We Like More
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started 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 Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
