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.
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. That said, here are three stocks under $50 to avoid and some other investments you should consider instead.
Smith & Wesson (SWBI)
Share Price: $15.24
With a history dating back to 1852, Smith & Wesson (NASDAQ:SWBI) is a firearms manufacturer known for its handguns and rifles.
Why Are We Out on SWBI?
- Sales tumbled by 13.1% annually over the last five years, showing consumer trends are working against it
- Low free cash flow margin of 6.2% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Smith & Wesson is trading at $15.24 per share, or 46x forward P/E. Dive into our free research report to see why there are better opportunities than SWBI.
Graphic Packaging Holding (GPK)
Share Price: $10.50
Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products.
Why Should You Dump GPK?
- Sales tumbled by 3.3% annually over the last two years, showing market trends are working against it during this cycle
- Sales are projected to be flat over the next 12 months and imply weak demand
- Earnings per share have contracted by 29.9% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Graphic Packaging Holding’s stock price of $10.50 implies a valuation ratio of 11.6x forward P/E. If you’re considering GPK for your portfolio, see our FREE research report to learn more.
BankUnited (BKU)
Share Price: $48.38
Born from the ashes of a failed Florida thrift during the 2009 financial crisis, BankUnited (NYSE:BKU) is a regional bank that provides commercial lending, deposit services, and treasury solutions to businesses and consumers primarily in Florida and the New York metropolitan area.
Why Are We Wary of BKU?
- Net interest income trends were unexciting over the last five years as its 5.5% annual growth was below the typical banking firm
- Inferior net interest margin of 2.9% means it must compensate for lower profitability through increased loan originations
- Annual earnings per share growth of 1.2% underperformed its revenue over the last five years, showing its incremental sales were less profitable
At $48.38 per share, BankUnited trades at 1.1x forward P/B. To fully understand why you should be careful with BKU, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.