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 downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. That said, here are three stocks under $10 to avoid and some other investments you should consider instead.
Coty (COTY)
Share Price: $4.85
With a portfolio boasting many household brands, Coty (NYSE: COTY) is a beauty products powerhouse spanning cosmetics, fragrances, and skincare.
Why Is COTY Risky?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Sales are projected to tank by 2.7% over the next 12 months as demand evaporates
- Underwhelming 0.6% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $4.85 per share, Coty trades at 8.8x forward P/E. To fully understand why you should be careful with COTY, check out our full research report (it’s free).
WideOpenWest (WOW)
Share Price: $4.13
Initially started in Denver as a cable television provider, WideOpenWest (NYSE: WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.
Why Do We Steer Clear of WOW?
- Performance surrounding its subscribers has lagged its peers
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
WideOpenWest is trading at $4.13 per share, or 1.3x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than WOW.
Orion (ORN)
Share Price: $8.86
Established in 1994, Orion (NYSE: ORN) provides construction services for marine infrastructure and industrial projects.
Why Do We Pass on ORN?
- Annual revenue growth of 2.4% over the last five years was below our standards for the industrials sector
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 10.1% annually while its revenue grew
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Orion’s stock price of $8.86 implies a valuation ratio of 54.7x forward P/E. Read our free research report to see why you should think twice about including ORN in your portfolio.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
