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.
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 is one stock under $50 with massive upside potential and two best left ignored.
Two Stocks Under $50 to Sell:
GXO Logistics (GXO)
Share Price: $37.79
With notable customers such as Nike and Apple, GXO (NYSE:GXO) manages outsourced supply chains and warehousing for various companies.
Why Are We Hesitant About GXO?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings per share were flat over the last two years and fell short of the peer group average
- 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
GXO Logistics is trading at $37.79 per share, or 12.5x forward price-to-earnings. To fully understand why you should be careful with GXO, check out our full research report (it’s free).
Royalty Pharma (RPRX)
Share Price: $33.86
Founded in 1996, Royalty Pharma (NASDAQ:RPRX) acquires pharmaceutical royalties and funds late-stage clinical trials, offering a unique revenue model centered on financing innovative drug development.
Why Does RPRX Worry Us?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Revenue base of $2.26 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 18.1 percentage points
Royalty Pharma’s stock price of $33.86 implies a valuation ratio of 7x forward price-to-earnings. Check out our free in-depth research report to learn more about why RPRX doesn’t pass our bar.
One Stock Under $50 to Watch:
Karat Packaging (KRT)
Share Price: $29.20
Founded as Lollicup, Karat Packaging (NASDAQ: KRT) distributes and manufactures environmentally-friendly disposable foodservice packaging solutions.
Why Do We Like KRT?
- Earnings growth has massively outpaced its peers over the last three years as its EPS has compounded at 27.3% annually
- Free cash flow margin expanded by 18.5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- ROIC punches in at 17.3%, illustrating management’s expertise in identifying profitable investments
At $29.20 per share, Karat Packaging trades at 8.9x forward EV-to-EBITDA. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.