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.
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 avoid and some other investments you should consider instead.
Gates Industrial Corporation (GTES)
Share Price: $24.34
Helping create one of the most memorable moments for the iconic “Jurassic Park” film, Gates (NYSE: GTES) offers power transmission and fluid transfer equipment for various industries.
Why Is GTES Not Exciting?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Anticipated sales growth of 5.2% for the next year implies demand will be shaky
- Underwhelming 6.9% return on capital reflects management’s difficulties in finding profitable growth opportunities
Gates Industrial Corporation’s stock price of $24.34 implies a valuation ratio of 16x forward P/E. To fully understand why you should be careful with GTES, check out our full research report (it’s free).
Sphere Entertainment (SPHR)
Share Price: $40.71
Famous for its viral Las Vegas Sphere venue, Sphere Entertainment (NYSE: SPHR) hosts live entertainment events and distributes content across various media platforms.
Why Do We Steer Clear of SPHR?
- Lackluster 2.4% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 7.1% annually
- Negative free cash flow raises questions about the return timeline for its investments
At $40.71 per share, Sphere Entertainment trades at 8.1x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including SPHR in your portfolio.
Peoples Bancorp (PEBO)
Share Price: $28.16
Founded in 1902 in Ohio and expanding through both organic growth and acquisitions, Peoples Bancorp (NASDAQ: PEBO) is a financial holding company that provides banking, insurance, equipment leasing, and investment services to consumers and businesses.
Why Are We Hesitant About PEBO?
- Estimated net interest income growth of 1.8% for the next 12 months implies demand will slow from its five-year trend
- Earnings per share fell by 12% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- Annual tangible book value per share growth of 1.4% over the last five years was below our standards for the bank sector
Peoples Bancorp is trading at $28.16 per share, or 0.8x forward P/B. Dive into our free research report to see why there are better opportunities than PEBO.
High-Quality Stocks for All Market Conditions
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