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.
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 are three stocks under $50 to avoid and some other investments you should consider instead.
Calavo (CVGW)
Share Price: $24.66
A trailblazer in the avocado industry, Calavo Growers (NASDAQ: CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.
Why Do We Steer Clear of CVGW?
- Annual revenue declines of 16.3% over the last three years indicate problems with its market positioning
- Projected sales decline of 16.1% over the next 12 months indicates demand will continue deteriorating
- Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 10.4%
Calavo is trading at $24.66 per share, or 16.2x forward P/E. If you’re considering CVGW for your portfolio, see our FREE research report to learn more.
OPENLANE (OPLN)
Share Price: $27.50
Facilitating the sale of approximately 1.3 million used vehicles in 2023, OPENLANE (NYSE: OPLN) operates digital marketplaces that connect sellers and buyers of used vehicles across North America and Europe, facilitating wholesale transactions.
Why Are We Cautious About OPLN?
- Annual sales declines of 2.4% for the past five years show its products and services struggled to connect with the market during this cycle
- 6.6 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
At $27.50 per share, OPENLANE trades at 20.3x forward P/E. To fully understand why you should be careful with OPLN, check out our full research report (it’s free).
Truist Financial (TFC)
Share Price: $45.07
Born from the 2019 merger of BB&T and SunTrust in one of the largest banking combinations since the 2008 financial crisis, Truist Financial (NYSE: TFC) is a bank holding company that offers a wide range of financial services including consumer and commercial banking, wealth management, insurance, and lending solutions.
Why Should You Dump TFC?
- The company has faced growth challenges as its 4.2% annual net interest income increases over the last five years fell short of other banking companies
- Projected net interest income decline of 11.3% for the next 12 months points to a tough demand environment ahead
- Earnings per share were flat over the last five years and fell short of the peer group average
Truist Financial’s stock price of $45.07 implies a valuation ratio of 0.9x forward P/B. Check out our free in-depth research report to learn more about why TFC doesn’t pass our bar.
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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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
