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.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. Keeping that in mind, here is one stock under $50 with massive upside potential and two that may have trouble.
Two Stocks Under $50 to Sell:
Sprout Social (SPT)
Share Price: $20.59
Founded by Justyn Howard and Aaron Rankin in 2010, Sprout Social (NASDAQ: SPT) provides a software as a service platform that companies can use to schedule and respond to posts on major social media networks like Twitter, Facebook, Instagram, Youtube and LinkedIn.
Why Are We Hesitant About SPT?
- Track record of operating losses stem from its decision to pursue growth instead of profits
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 6.1% for the last year
Sprout Social’s stock price of $20.59 implies a valuation ratio of 2.6x forward price-to-sales. Dive into our free research report to see why there are better opportunities than SPT.
Knowles (KN)
Share Price: $12.37
With roots dating back to 1946 and a focus on components that must perform flawlessly in critical situations, Knowles (NYSE: KN) designs and manufactures specialized electronic components like high-performance capacitors, microphones, and speakers for medical technology, defense, and industrial applications.
Why Are We Out on KN?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 2.7% annually over the last four years
- Sales are projected to tank by 14.3% over the next 12 months as its demand continues evaporating
- Earnings per share have dipped by 4.1% annually over the past five years, which is concerning because stock prices follow EPS over the long term
Knowles is trading at $12.37 per share, or 11.4x forward price-to-earnings. To fully understand why you should be careful with KN, check out our full research report (it’s free).
One Stock Under $50 to Buy:
Core & Main (CNM)
Share Price: $43
Formerly a division of industrial distributor HD Supply, Core & Main (NYSE: CNM) is a provider of water, wastewater, and fire protection products and services.
Why Is CNM a Good Business?
- Market share has increased this cycle as its 17% annual revenue growth over the last five years was exceptional
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Share buybacks catapulted its annual earnings per share growth to 19.5%, which outperformed its revenue gains over the last two years
At $43 per share, Core & Main trades at 19x forward price-to-earnings. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 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 Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
