Stocks in the $10-50 range offer a sweet spot between affordability and stability as they’re typically more established than penny stocks. But their headline prices don’t guarantee quality, and investors should exercise caution as some have shaky business models.
These dynamic 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 is one stock under $50 with huge potential and two that could be down big.
Two Stocks Under $50 to Sell:
Western Digital (WDC)
Share Price: $44.89
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Why Are We Out on WDC?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- High input costs result in an inferior gross margin of 23.7% that must be offset through higher volumes
- Responsiveness to unforeseen market trends is restricted due to its substandard operating profitability
Western Digital’s stock price of $44.89 implies a valuation ratio of 6.3x forward price-to-earnings. Check out our free in-depth research report to learn more about why WDC doesn’t pass our bar.
Genco (GNK)
Share Price: $14.15
Headquartered in NYC, Genco (NYSE:GNK) is a shipping company that transports dry bulk cargo along worldwide maritime routes.
Why Are We Wary of GNK?
- Number of owned vessels has disappointed over the past two years, indicating weak demand for its offerings
- Projected sales decline of 14.9% over the next 12 months indicates demand will continue deteriorating
- Issuance of new shares over the last two years caused its earnings per share to fall by 34.7% annually, even worse than its revenue declines
Genco is trading at $14.15 per share, or 19.3x forward price-to-earnings. If you’re considering GNK for your portfolio, see our FREE research report to learn more.
One Stock Under $50 to Watch:
Barrett (BBSI)
Share Price: $41.19
Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ:BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.
Why Are We Fans of BBSI?
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are climbing as it finds even more attractive growth opportunities
- Improving returns on capital reflect management’s ability to monetize investments
At $41.19 per share, Barrett trades at 18.3x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
With rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle.
Put yourself in the driver’s seat by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.