Investors can certainly boost their returns by concentrating on stocks trading between $1 and $10. However, a disciplined approach is necessary because many of these businesses are speculative and lack the underlying fundamentals to support their prices.
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.
Health Catalyst (HCAT)
Share Price: $3.89
Founded by healthcare professionals Tom Burton and Steve Barlow in 2008, Health Catalyst (NASDAQ: HCAT) provides data and analytics technology to healthcare organizations, enabling them to improve care and lower costs.
Why Is HCAT Not Exciting?
- Sales trends were unexciting over the last three years as its 7% annual growth was well below the typical software company
- Bad unit economics and steep infrastructure costs are reflected in its gross margin of 45.9%, one of the worst among software companies
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
Health Catalyst is trading at $3.89 per share, or 0.8x forward price-to-sales. Read our free research report to see why you should think twice about including HCAT in your portfolio.
Sally Beauty (SBH)
Share Price: $9.07
Catering to both everyday consumers as well as salon professionals, Sally Beauty (NYSE: SBH) is a retailer that sells salon-quality beauty products such as makeup and haircare products.
Why Do We Think SBH Will Underperform?
- Ongoing store closures and lackluster same-store sales indicate sluggish demand and a focus on consolidation
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Revenue base of $3.70 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
At $9.07 per share, Sally Beauty trades at 4.6x forward P/E. If you’re considering SBH for your portfolio, see our FREE research report to learn more.
Sabre (SABR)
Share Price: $2.88
Originally a division of American Airlines, Sabre (NASDAQ: SABR) is a technology provider for the global travel and tourism industry.
Why Do We Avoid SABR?
- Performance surrounding its central reservation system transactions has lagged its peers
- Poor free cash flow margin of -0.9% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Sabre’s stock price of $2.88 implies a valuation ratio of 15.4x forward P/E. To fully understand why you should be careful with SABR, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
