Stocks trading between $10 and $50 can be particularly interesting as they frequently represent businesses that have survived their early challenges. However, investors should remain vigilant as some may still have unproven business models, leaving them vulnerable to the ebbs and flows of the broader market.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three stocks under $50 to avoid and some other investments you should consider instead.
Smith & Wesson (SWBI)
Share Price: $13.45
With a history dating back to 1852, Smith & Wesson (NASDAQ: SWBI) is a firearms manufacturer known for its handguns and rifles.
Why Do We Pass on SWBI?
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 7.5% for the last two years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $13.45 per share, Smith & Wesson trades at 25.8x forward P/E. Read our free research report to see why you should think twice about including SWBI in your portfolio.
AT&T (T)
Share Price: $26.53
Founded by Alexander Graham Bell, AT&T (NYSE: T) is a multinational telecomm conglomerate providing a range of communications and internet services.
Why Do We Avoid T?
- Products and services fail to spark excitement with consumers, as seen in its flat sales over the last five years
- Sales over the last five years were less profitable as its earnings per share fell by 6.9% annually while its revenue was flat
- Free cash flow margin is not anticipated to grow over the next year
AT&T’s stock price of $26.53 implies a valuation ratio of 10.8x forward P/E. Check out our free in-depth research report to learn more about why T doesn’t pass our bar.
Peoples Bancorp (PEBO)
Share Price: $39.88
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 Do We Think PEBO Will Underperform?
- Muted 2.4% annual revenue growth over the last two years shows its demand lagged behind its banking peers
- Performance over the past five years shows its incremental sales were less profitable, as its 1.1% annual earnings per share growth trailed its revenue gains
- Estimated tangible book value per share growth of 5.5% for the next 12 months implies profitability will slow from its two-year trend
Peoples Bancorp is trading at $39.88 per share, or 1.1x forward P/B. If you’re considering PEBO for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
