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.
Chewy (CHWY)
Share Price: $18.56
Founded by Ryan Cohen, who later became known for his involvement in GameStop, Chewy (NYSE: CHWY) is an online retailer specializing in pet food, supplies, and healthcare services.
Why Does CHWY Fall Short?
- The company has faced growth challenges as its 7.1% annual revenue increases over the last three years fell short of other consumer internet companies
- Projected sales growth of 6.8% for the next 12 months suggests sluggish demand
- Gross margin of 29.6% is below its competitors, leaving less money to invest in areas like marketing and R&D
Chewy is trading at $18.56 per share, or 8x forward EV/EBITDA. Check out our free in-depth research report to learn more about why CHWY doesn’t pass our bar.
Genesis Energy (GEL)
Share Price: $14.11
Operating a 64% stake in the Poseidon Pipeline, one of the Gulf of Mexico's largest crude oil pipelines, Genesis Energy (NYSE: GEL) provides midstream services like pipeline transportation, storage, and processing for crude oil and natural gas producers and refiners.
Why Do We Avoid GEL?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.5% annually over the last five years
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 25.3%
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital on unfavorable terms if market conditions deteriorate
Genesis Energy’s stock price of $14.11 implies a valuation ratio of 8.2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than GEL.
Sallie Mae (SLM)
Share Price: $24.99
Originally created as a government-sponsored enterprise before privatizing in 2004, Sallie Mae (NASDAQ: SLM) is a financial services company that provides private education loans, savings products, and educational resources to help students and families pay for college.
Why Should You Dump SLM?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Earnings per share lagged its peers over the last five years as they only grew by 2.6% annually
At $24.99 per share, Sallie Mae trades at 9.4x forward P/E. If you’re considering SLM for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
