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. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.
BJ's (BJRI)
Share Price: $34.10
Founded in 1978 in California, BJ’s Restaurants (NASDAQ: BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.
Why Are We Out on BJRI?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Gross margin of 14.9% reflects the bad unit economics inherent in most restaurant businesses
- Underwhelming 4.5% return on capital reflects management’s difficulties in finding profitable growth opportunities
BJ’s stock price of $34.10 implies a valuation ratio of 14.3x forward P/E. Check out our free in-depth research report to learn more about why BJRI doesn’t pass our bar.
Hayward (HAYW)
Share Price: $14.22
Credited with introducing the first variable-speed pool pump, Hayward (NYSE: HAYW) makes residential and commercial pool equipment and accessories.
Why Are We Wary of HAYW?
- Sales trends were unexciting over the last five years as its 5.1% annual growth was below the typical industrials company
- Estimated sales growth of 4.2% for the next 12 months implies demand will slow from its two-year trend
- Earnings per share have contracted by 20.8% annually over the last four years, a headwind for returns as stock prices often echo long-term EPS performance
At $14.22 per share, Hayward trades at 16.8x forward P/E. To fully understand why you should be careful with HAYW, check out our full research report (it’s free).
Regions Financial (RF)
Share Price: $25.62
Tracing its roots back to 1971 and operating in a region known as the "heart of Dixie," Regions Financial (NYSE: RF) is a financial holding company that provides banking services, wealth management, and specialty financial solutions across the South, Midwest, and Texas.
Why Are We Cautious About RF?
- Muted 5.1% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Net interest margin dropped by 38.2 basis points (100 basis points = 1 percentage point) over the last two years, implying the firm’s loan book profitability fell as competitors entered the market
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 2.2% annually
Regions Financial is trading at $25.62 per share, or 1.2x forward P/B. Read our free research report to see why you should think twice about including RF in your portfolio.
Stocks We Like More
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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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
