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. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.

MGP Ingredients (MGPI)

Share Price: $28.93

Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQ: MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry

Why Are We Out on MGPI?

1. Products have few die-hard fans as sales have declined by 6% annually over the last three years
2. Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
3. Inability to adjust its cost structure while its revenue declined over the last year led to a 13.6 percentage point drop in the company’s operating margin

MGP Ingredients is trading at $28.93 per share, or 11.2x forward P/E. To fully understand why you should be careful with MGPI, check out our full research report (it’s free).

Artivion (AORT)

Share Price: $43.49

Formerly known as CryoLife until its 2022 rebranding, Artivion (NYSE: AORT) develops and manufactures medical devices and preserves human tissues used in cardiac and vascular surgical procedures for patients with aortic disease.

Why Does AORT Fall Short?

1. Modest revenue base of $405 million gives it less fixed cost leverage and fewer distribution channels than larger companies
2. Poor free cash flow margin of -0.6% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

At $43.49 per share, Artivion trades at 58.2x forward P/E. Read our free research report to see why you should think twice about including AORT in your portfolio.

Azenta (AZTA)

Share Price: $30.30

Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ: AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.

Why Should You Sell AZTA?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 7.2% annually over the last five years
2. Sales were less profitable over the last five years as its earnings per share fell by 18.7% annually, worse than its revenue declines
3. 22.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Azenta’s stock price of $30.30 implies a valuation ratio of 40x forward P/E. Check out our free in-depth research report to learn more about why AZTA doesn’t pass our bar.

Stocks We Like More

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