The $10-50 price range often includes mid-sized businesses with proven track records and plenty of growth runway ahead. They also usually carry less risk than penny stocks, though they’re not immune to volatility as many lack the scale advantages of their larger peers.
These dynamics can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. That said, here is one stock under $50 that could 10x and two that may have trouble.
Two Stocks Under $50 to Sell:
Victoria's Secret (VSCO)
Share Price: $21.34
Spun off from L Brands in 2020, Victoria’s Secret (NYSE: VSCO) is an intimate clothing and beauty retailer that sells its own brands of lingerie, undergarments, and personal fragrances.
Why Do We Steer Clear of VSCO?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Earnings per share have dipped by 25.8% annually over the past three years, which is concerning because stock prices follow EPS over the long term
Victoria's Secret’s stock price of $21.34 implies a valuation ratio of 9.9x forward P/E. If you’re considering VSCO for your portfolio, see our FREE research report to learn more.
Genesco (GCO)
Share Price: $27
Spanning a broad range of styles, brands, and prices, Genesco (NYSE: GCO) sells footwear, apparel, and accessories through multiple brands and banners.
Why Do We Pass on GCO?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Genesco is trading at $27 per share, or 17.1x forward P/E. Read our free research report to see why you should think twice about including GCO in your portfolio.
One Stock Under $50 to Watch:
Lyft (LYFT)
Share Price: $15.81
Founded by Logan Green and John Zimmer as a long-distance intercity carpooling company Zimride, Lyft (NASDAQ: LYFT) operates a ridesharing network in the US and Canada.
Why Could LYFT Be a Winner?
- Active Riders have grown by 10.3% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 39.2% over the last three years outstripped its revenue performance
- Free cash flow margin grew by 23.7 percentage points over the last few years, giving the company more chips to play with
At $15.81 per share, Lyft trades at 11.8x forward EV/EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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