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.
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.
Bath and Body Works (BBWI)
Share Price: $20.32
Spun off from L Brands in 2020, Bath & Body Works (NYSE: BBWI) is a personal care and home fragrance retailer where consumers can find specialty shower gels, scented candles for the home, and lotions.
Why Does BBWI Give Us Pause?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Earnings per share lagged its peers over the last three years as they only grew by 4.5% annually
At $20.32 per share, Bath and Body Works trades at 7.3x forward P/E. Check out our free in-depth research report to learn more about why BBWI doesn’t pass our bar.
Perma-Fix (PESI)
Share Price: $13.86
Tackling hazardous waste challenges since 1990, Perma-Fix (NASDAQ: PESI) provides environmental waste treatment services.
Why Do We Think PESI Will Underperform?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 10.7% annually over the last five years
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 26.9 percentage points
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Perma-Fix’s stock price of $13.86 implies a valuation ratio of 3.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than PESI.
American Airlines (AAL)
Share Price: $16.97
One of the ‘Big Four’ airlines in the US, American Airlines (NASDAQ: AAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
Why Do We Avoid AAL?
- Number of revenue passenger miles has disappointed over the past two years, indicating weak demand for its offerings
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens
American Airlines is trading at $16.97 per share, or 29.2x forward P/E. If you’re considering AAL for your portfolio, see our FREE research report to learn more.
Stocks We Like More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
