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.
These dynamics 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. That said, here are three stocks under $50 to avoid and some other investments you should consider instead.
Domo (DOMO)
Share Price: $14.55
Founded by Josh James after selling his former business Omniture to Adobe, Domo (NASDAQ: DOMO) provides business intelligence software that allows managers to access and visualize critical business metrics in real-time, using their smartphones.
Why Are We Out on DOMO?
- Products, pricing, or go-to-market strategy need some adjustments as its billings have averaged 2.4% declines over the last year
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
At $14.55 per share, Domo trades at 1.8x forward price-to-sales. Dive into our free research report to see why there are better opportunities than DOMO.
QuidelOrtho (QDEL)
Share Price: $25.19
Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ: QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.
Why Do We Steer Clear of QDEL?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Free cash flow margin shrank by 21 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
QuidelOrtho’s stock price of $25.19 implies a valuation ratio of 9x forward P/E. To fully understand why you should be careful with QDEL, check out our full research report (it’s free).
Ellington Financial (EFC)
Share Price: $13.36
Operating under the guidance of Ellington Management Group, a respected name in structured credit markets, Ellington Financial (NYSE: EFC) acquires and manages a diverse portfolio of mortgage-related, consumer-related, and other financial assets to generate returns for investors.
Why Should You Sell EFC?
- 2.6% annual net interest income growth over the last five years was slower than its banking peers
- Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
- Tangible book value per share tumbled by 2.9% annually over the last five years, showing banking sector trends are working against its favor during this cycle
Ellington Financial is trading at $13.36 per share, or 1x forward P/B. Check out our free in-depth research report to learn more about why EFC doesn’t pass our bar.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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 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
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