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.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. That said, here are three stocks under $50 to avoid and some other investments you should consider instead.
American Eagle (AEO)
Share Price: $12.01
With a heavy focus on denim, American Eagle Outfitters (NYSE: AEO) is a specialty retailer offering an assortment of apparel and accessories to young adults.
Why Is AEO Not Exciting?
- Muted 4.3% annual revenue growth over the last five years shows its demand lagged behind its consumer retail peers
- Projected sales decline of 2.7% for the next 12 months points to a tough demand environment ahead
- ROIC of 2.6% reflects management’s challenges in identifying attractive investment opportunities
American Eagle is trading at $12.01 per share, or 6.7x forward P/E. Check out our free in-depth research report to learn more about why AEO doesn’t pass our bar.
Zumiez (ZUMZ)
Share Price: $13.75
With store associates called “Zumiez Stash Members”, Zumiez (NASDAQ: ZUMZ) is a specialty retailer of street and skate apparel, footwear, and accessories.
Why Are We Out on ZUMZ?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Smaller revenue base of $889.2 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Persistent operating losses suggest the business manages its expenses poorly
Zumiez’s stock price of $13.75 implies a valuation ratio of 33.6x forward P/E. To fully understand why you should be careful with ZUMZ, check out our full research report (it’s free).
Avnet (AVT)
Share Price: $50.87
With a century-long history of adapting to technological evolution, Avnet (NASDAQ: AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components.
Why Does AVT Give Us Pause?
- Sales tumbled by 8.3% annually over the last two years, showing market trends are working against its favor during this cycle
- Earnings per share have contracted by 31% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Poor free cash flow margin of 0.1% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $50.87 per share, Avnet trades at 10.2x forward P/E. If you’re considering AVT for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
