Stocks in the $10-50 range offer a sweet spot between affordability and stability as they’re typically more established than penny stocks. But their headline prices don’t guarantee quality, and investors should exercise caution as some have shaky business models.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three stocks under $50 to avoid and some other investments you should consider instead.
Columbus McKinnon (CMCO)
Share Price: $16.39
With 19 different brands across the globe, Columbus McKinnon (NASDAQ: CMCO) offers material handling equipment for the construction, manufacturing, and transportation industries.
Why Do We Think CMCO Will Underperform?
- Sales trends were unexciting over the last two years as its 1.4% annual growth was below the typical industrials company
- Earnings per share fell by 1% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Free cash flow margin dropped by 10.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $16.39 per share, Columbus McKinnon trades at 6.1x forward P/E. Read our free research report to see why you should think twice about including CMCO in your portfolio.
L.B. Foster (FSTR)
Share Price: $25.20
Founded with a $2,500 loan, L.B. Foster (NASDAQ: FSTR) is a provider of products and services for the transportation and energy infrastructure sectors, including rail products, construction materials, and coating solutions.
Why Do We Pass on FSTR?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.3% annually over the last five years
- Low free cash flow margin of 0.4% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Low returns on capital reflect management’s struggle to allocate funds effectively
L.B. Foster is trading at $25.20 per share, or 5.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than FSTR.
First Merchants (FRME)
Share Price: $40.74
Dating back to 1893 when it first opened its doors in Indiana, First Merchants (NASDAQ: FRME) is a Midwest regional bank providing commercial, consumer, and wealth management services through branches in Indiana, Ohio, Michigan, and Illinois.
Why Are We Hesitant About FRME?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.2% annually over the last two years
- Concessions to defend its market share have ramped up over the last two years as its net interest margin decreased by 26.7 basis points (100 basis points = 1 percentage point)
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 9.8% annually, worse than its revenue
First Merchants’s stock price of $40.74 implies a valuation ratio of 1x forward P/B. Check out our free in-depth research report to learn more about why FRME doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
