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3 Stocks Under $50 Walking a Fine Line

RPD Cover Image

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. That said, here are three stocks under $50 to swipe left on and some alternatives you should look into instead.

Rapid7 (RPD)

Share Price: $19.60

With its name inspired by the need for quick responses to cyber threats, Rapid7 (NASDAQ: RPD) provides cybersecurity software and services that help organizations detect vulnerabilities, monitor threats, and respond to security incidents.

Why Do We Think RPD Will Underperform?

  1. Customers were hesitant to make long-term commitments to its software as its 4.2% average ARR growth over the last year was sluggish
  2. Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its two-year trend
  3. Operating margin improvement of 1.7 percentage points over the last year demonstrates its ability to scale efficiently

At $19.60 per share, Rapid7 trades at 1.4x forward price-to-sales. Check out our free in-depth research report to learn more about why RPD doesn’t pass our bar.

Greenbrier (GBX)

Share Price: $45.33

Having designed the industry’s first double-decker railcar in the 1980s, Greenbrier (NYSE: GBX) supplies the freight rail transportation industry with railcars and related services.

Why Are We Cautious About GBX?

  1. Annual sales declines of 4.5% for the past two years show its products and services struggled to connect with the market during this cycle
  2. Gross margin of 13.5% is below its competitors, leaving less money to invest in areas like marketing and R&D
  3. Cash-burning history makes us doubt the long-term viability of its business model

Greenbrier’s stock price of $45.33 implies a valuation ratio of 8.8x forward P/E. Dive into our free research report to see why there are better opportunities than GBX.

Silgan Holdings (SLGN)

Share Price: $42.75

Established in 1987, Silgan Holdings (NYSE: SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.

Why Is SLGN Risky?

  1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
  2. Gross margin of 16.9% reflects its high production costs
  3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Silgan Holdings is trading at $42.75 per share, or 10.5x forward P/E. If you’re considering SLGN for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

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