Stocks trading in the $1-10 range are generally smaller players with less risk than their penny stock counterparts. But that doesn’t mean the underlying businesses are cheap, and we advise caution as many have questionable fundamentals.

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 $10 to avoid and some other investments you should consider instead.

Altice (ATUS)

Share Price: $2.23

Based in Long Island City, Altice USA (NYSE: ATUS) is a telecommunications company offering cable, internet, telephone, and television services across the United States.

Why Should You Dump ATUS?

1. Demand for its offerings was relatively low as its number of broadband subscribers has underwhelmed
2. Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 31.1% annually, worse than its revenue
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $2.23 per share, Altice trades at 0.3x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than ATUS.

Redwire (RDW)

Share Price: $8.42

Based in Jacksonville, Florida, Redwire (NYSE: RDW) is a provider of systems and components used in space infrastructure.

Why Do We Pass on RDW?

1. Historically negative EPS casts doubt for cautious investors and clouds its long-term earnings prospects
2. Free cash flow margin dropped by 27.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Redwire’s stock price of $8.42 implies a valuation ratio of 9.6x forward EV-to-EBITDA. If you’re considering RDW for your portfolio, see our FREE research report to learn more.

TPI Composites (TPIC)

Share Price: $0.12

Founded in 1968, TPI Composites (NASDAQ: TPIC) manufactures composite wind turbine blades and provides related precision molding and assembly systems.

Why Is TPIC Risky?

1. Customers had second thoughts about committing to its offerings over the past two years as its billings averaged 11.5% declines
2. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
3. Negative earnings profile makes it challenging to secure favorable financing terms from lenders

TPI Composites is trading at $0.12 per share, or 0.1x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why TPIC doesn’t pass our bar.

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