Investors can certainly boost their returns by concentrating on stocks trading between $1 and $10. However, a disciplined approach is necessary because many of these businesses are speculative and lack the underlying fundamentals to support their prices.
The bad behavior exhibited by lower-quality companies in this space can spook even the most seasoned professionals, which is why we started StockStory - to separate the good from the bad. Keeping that in mind, here are three stocks under $10 to avoid and some other investments you should consider instead.
RE/MAX (RMAX)
Share Price: $5.81
Short for Real Estate Maximums, RE/MAX (NYSE: RMAX) operates a real estate franchise network spanning over 100 countries and territories.
Why Should You Sell RMAX?
- Sluggish trends in its agents suggest customers aren’t adopting its solutions as quickly as the company hoped
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 7.1% annually while its revenue grew
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 5.5 percentage points over the next year
RE/MAX’s stock price of $5.81 implies a valuation ratio of 4.3x forward P/E. To fully understand why you should be careful with RMAX, check out our full research report (it’s free).
Byrna (BYRN)
Share Price: $9.18
Providing civilians with tools to disable, disarm, and deter would-be assailants, Byrna (NASDAQ: BYRN) is a provider of non-lethal weapons.
Why Are We Hesitant About BYRN?
- Subpar operating margin of -0.1% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Cash-burning history makes us doubt the long-term viability of its business model
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $9.18 per share, Byrna trades at 22.4x forward P/E. Dive into our free research report to see why there are better opportunities than BYRN.
ProFrac (ACDC)
Share Price: $6.27
Operating one of the largest electric-powered fracturing fleets in North America, ProFrac (NASDAQ: ACDC) provides hydraulic fracturing services that help oil and gas companies extract hydrocarbons from underground shale formations.
Why Are We Wary of ACDC?
- Costly operations and weak unit economics result in an inferior gross margin of 32.8% that must be offset through higher production volumes
- Day-to-day expenses have swelled relative to revenue over the last five years as its EBITDA margin fell by 1.6 percentage points
- Low free cash flow margin of 4.3% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
ProFrac is trading at $6.27 per share, or 9.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why ACDC doesn’t pass our bar.
Stocks We Like More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
