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3 Stocks Under $50 We Approach with Caution

IAC Cover Image

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 swipe left on and some alternatives you should look into instead.

IAC (IAC)

Share Price: $37.38

Originally known as InterActiveCorp and built through Barry Diller's strategic acquisitions since the 1990s, IAC (NASDAQ: IAC) operates a portfolio of category-leading digital businesses including Dotdash Meredith, Angi, and Care.com, focusing on digital publishing, home services, and caregiving platforms.

Why Do We Think IAC Will Underperform?

  1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
  2. Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 19.1% annually
  3. Negative returns on capital show that some of its growth strategies have backfired

IAC’s stock price of $37.38 implies a valuation ratio of 24.3x forward P/E. Read our free research report to see why you should think twice about including IAC in your portfolio.

Radian Group (RDN)

Share Price: $32.76

Founded during the housing boom of 1977 and weathering multiple real estate cycles since, Radian Group (NYSE: RDN) provides mortgage insurance and real estate services, helping lenders manage risk and homebuyers achieve affordable homeownership.

Why Are We Hesitant About RDN?

  1. Sales tumbled by 2.3% annually over the last five years, showing market trends are working against its favor during this cycle
  2. Insurance policy sales contracted this cycle as net premiums earned decreased by 3.2% annually over the last five years
  3. Earnings per share lagged its peers over the last two years as they only grew by 3.9% annually

At $32.76 per share, Radian Group trades at 0.8x forward P/B. Check out our free in-depth research report to learn more about why RDN doesn’t pass our bar.

KeyCorp (KEY)

Share Price: $18.93

Tracing its roots back to 1849 during the California Gold Rush era, KeyCorp (NYSE: KEY) operates KeyBank, a full-service regional bank providing retail and commercial banking, wealth management, and investment services across 15 states.

Why Are We Cautious About KEY?

  1. Net interest income trends were unexciting over the last five years as its 2.9% annual growth was below the typical banking firm
  2. Inferior net interest margin of 2.4% means it must compensate for lower profitability through increased loan originations
  3. Tangible book value per share was flat over the last five years, indicating it’s failed to build equity value this cycle

KeyCorp is trading at $18.93 per share, or 1.1x forward P/B. Dive into our free research report to see why there are better opportunities than KEY.

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