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.
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 $10 to avoid and some other investments you should consider instead.
Amtech (ASYS)
Share Price: $4.17
Focusing on the silicon carbide and power semiconductor sectors, Amtech Systems (NASDAQ: ASYS) produces the machinery and related chemicals needed for manufacturing semiconductors.
Why Is ASYS Risky?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 7.9% annually over the last two years
- Historical operating margin losses point to an inefficient cost structure
- Negative returns on capital show that some of its growth strategies have backfired, and its shrinking returns suggest its past profit sources are losing steam
Amtech’s stock price of $4.17 implies a valuation ratio of 15.6x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including ASYS in your portfolio.
Clover Health (CLOV)
Share Price: $3.12
Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ: CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.
Why Are We Cautious About CLOV?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 28.7% annually over the last two years
- Weak customer trends over the past two years suggest it may need to improve its products, pricing, or go-to-market strategy
- Cash burn makes us question whether it can achieve sustainable long-term growth
At $3.12 per share, Clover Health trades at 42.6x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than CLOV.
Xerox (XRX)
Share Price: $4.90
Pioneering the modern office copier and inventing technologies like Ethernet and the laser printer, Xerox (NASDAQ: XRX) provides document management systems, printing technology, and workplace solutions to businesses of all sizes across the globe.
Why Do We Think XRX Will Underperform?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.7% annually over the last five years
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Xerox is trading at $4.90 per share, or 5x forward P/E. To fully understand why you should be careful with XRX, check out our full research report (it’s free).
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
