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. That said, here are three stocks under $10 to swipe left on and some alternatives you should look into instead.
Torrid (CURV)
Share Price: $2.16
Promoting a message of body positivity and inclusiveness, Torrid Holdings (NYSE: CURV) is a plus-size women’s apparel and accessories retailer.
Why Should You Sell CURV?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Estimated sales decline of 5.8% for the next 12 months implies a challenging demand environment
- Earnings per share have contracted by 52.4% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
At $2.16 per share, Torrid trades at 17x forward P/E. If you’re considering CURV for your portfolio, see our FREE research report to learn more.
Soho House (SHCO)
Share Price: $7.42
Boasting fancy locations in hubs such as NYC and Miami, Soho House (NYSE: SHCO) is a global hospitality brand offering exclusive private member clubs, hotels, and restaurants.
Why Do We Pass on SHCO?
- Performance surrounding its members has lagged its peers
- Cash-burning history makes us doubt the long-term viability of its business model
- High net-debt-to-EBITDA ratio of 16× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Soho House’s stock price of $7.42 implies a valuation ratio of 7.9x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including SHCO in your portfolio.
Hudson Technologies (HDSN)
Share Price: $9.78
Founded in 1991, Hudson Technologies (NASDAQ: HDSN) specializes in refrigerant services and solutions, providing refrigerant sales, reclamation, and recycling.
Why Are We Hesitant About HDSN?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 14.1% annually over the last two years
- Earnings per share have dipped by 46.8% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
Hudson Technologies is trading at $9.78 per share, or 10.8x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than HDSN.
Stocks We Like More
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