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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three stocks under $50 to swipe left on and some alternatives you should look into instead.
The Cheesecake Factory (CAKE)
Share Price: $47.35
Celebrated for its delicious (and free) brown bread, gigantic portions, and delectable desserts, Cheesecake Factory (NASDAQ: CAKE) is an iconic American restaurant chain that also owns and operates a portfolio of separate restaurant brands.
Why Do We Think Twice About CAKE?
- Subpar operating margin of 4.1% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Underwhelming -0.3% return on capital reflects management’s difficulties in finding profitable growth opportunities
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
The Cheesecake Factory is trading at $47.35 per share, or 12.7x forward price-to-earnings. Read our free research report to see why you should think twice about including CAKE in your portfolio.
RXO (RXO)
Share Price: $18.60
With access to millions of trucks, RXO (NYSE: RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.
Why Are We Out on RXO?
- Sales tumbled by 2.6% annually over the last two years, showing market trends are working against its favor during this cycle
- Incremental sales over the last four years were much less profitable as its earnings per share fell by 27.6% annually while its revenue grew
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $18.60 per share, RXO trades at 45.1x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than RXO.
Douglas Dynamics (PLOW)
Share Price: $24.36
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE: PLOW) offers snow and ice equipment for the roads and sidewalks.
Why Do We Steer Clear of PLOW?
- 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 9.7% annually while its revenue was flat
- Waning returns on capital imply its previous profit engines are losing steam
Douglas Dynamics’s stock price of $24.36 implies a valuation ratio of 13.7x forward price-to-earnings. If you’re considering PLOW 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 United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
