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.
Macy's (M)
Share Price: $23.86
With a storied history that began with its 1858 founding, Macy’s (NYSE:M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Why Do We Think M Will Underperform?
- Store closures and poor same-store sales reveal weak demand and a push toward operational efficiency
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Earnings per share have dipped by 17.8% annually over the past three years, which is concerning because stock prices follow EPS over the long term
At $23.86 per share, Macy's trades at 11x forward P/E. If you’re considering M for your portfolio, see our FREE research report to learn more.
MGP Ingredients (MGPI)
Share Price: $17.80
Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQ:MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry
Why Do We Steer Clear of MGPI?
- Products aren’t resonating with the market as its revenue declined by 14.6% annually over the last three years
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 22% annually, worse than its revenue
- 9.5 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position
MGP Ingredients’s stock price of $17.80 implies a valuation ratio of 11.1x forward P/E. To fully understand why you should be careful with MGPI, check out our full research report (it’s free).
Planet Fitness (PLNT)
Share Price: $48.24
Founded by two brothers who purchased a struggling gym, Planet Fitness (NYSE:PLNT) is a gym franchise that caters to casual fitness users by providing a friendly and inclusive atmosphere.
Why Is PLNT Risky?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and in-store experience
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 2.6 percentage points
- Improving returns on capital suggest management is identifying more profitable investments
Planet Fitness is trading at $48.24 per share, or 13.9x forward P/E. Dive into our free research report to see why there are better opportunities than PLNT.
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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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.