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 swipe left on and some alternatives you should look into instead.
BlackLine (BL)
Share Price: $27.26
Born from the vision to eliminate tedious manual spreadsheet work for accountants, BlackLine (NASDAQ: BL) provides cloud-based software that automates and streamlines financial close, intercompany accounting, and invoice-to-cash processes for accounting departments.
Why Do We Pass on BL?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 8.5% underwhelmed
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
BlackLine’s stock price of $27.26 implies a valuation ratio of 2.4x forward price-to-sales. Read our free research report to see why you should think twice about including BL in your portfolio.
Acadia Healthcare (ACHC)
Share Price: $25.42
With a network of over 250 facilities serving patients in 38 states and Puerto Rico, Acadia Healthcare (NASDAQ: ACHC) operates facilities providing mental health and substance use disorder treatment services across the United States.
Why Should You Dump ACHC?
- Disappointing admissions over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 6.7% annually while its revenue grew
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Acadia Healthcare is trading at $25.42 per share, or 17.7x forward P/E. To fully understand why you should be careful with ACHC, check out our full research report (it’s free).
Oceaneering (OII)
Share Price: $37.74
Deploying a fleet of 250 tethered underwater robots around the globe, Oceaneering International (NYSE: OII) provides remotely operated underwater vehicles and subsea equipment for offshore energy exploration.
Why Do We Avoid OII?
- Sales were flat over the last ten years, indicating it’s failed to expand this cycle
- Gross margin of 17.4% reflects its high production costs and unfavorable asset base
- Poor free cash flow margin of 4.7% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $37.74 per share, Oceaneering trades at 1.3x forward price-to-sales. If you’re considering OII for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
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