The $10-50 price range often includes mid-sized businesses with proven track records and plenty of growth runway ahead. They also usually carry less risk than penny stocks, though they’re not immune to volatility as many lack the scale advantages of their larger peers.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.
Intel (INTC)
Share Price: $45.13
Inventor of the x86 processor that powered decades of technological innovation in PCs, data centers, and numerous other markets, Intel (NASDAQ: INTC) is a leading manufacturer of computer processors and graphics chips.
Why Is INTC Risky?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.2% annually over the last five years
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 18.3 percentage points
At $45.13 per share, Intel trades at 95.9x forward P/E. Check out our free in-depth research report to learn more about why INTC doesn’t pass our bar.
Trinity (TRN)
Share Price: $31.96
Operating under the trade name TrinityRail, Trinity (NYSE: TRN) is a provider of railcar products and services in North America.
Why Is TRN Not Exciting?
- Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 27.8% declines over the past two years
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Free cash flow margin dropped by 22.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Trinity is trading at $31.96 per share, or 1.2x trailing 12-month price-to-sales. Read our free research report to see why you should think twice about including TRN in your portfolio.
Rivian (RIVN)
Share Price: $15.82
The manufacturer of Amazon’s delivery trucks, Rivian (NASDAQ: RIVN) designs, manufactures, and sells electric vehicles and commercial delivery vans.
Why Are We Cautious About RIVN?
- Declining vehicles delivered suggest it might need to invest in product improvements to get back on track
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Negative EBITDA restricts its access to capital and increases the probability of shareholder dilution if things turn unexpectedly
Rivian’s stock price of $15.82 implies a valuation ratio of 2.7x forward price-to-sales. If you’re considering RIVN for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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