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.
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. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.
DigitalOcean (DOCN)
Share Price: $29.61
Started by brothers Ben and Moisey Uretsky, DigitalOcean (NYSE: DOCN) provides a simple, low-cost platform that allows developers and small and medium-sized businesses to host applications and data in the cloud.
Why Does DOCN Fall Short?
- Platform has low switching costs as its net revenue retention rate of 98.2% demonstrates high turnover
- Gross margin of 59.9% is way below its competitors, leaving less money to invest in areas like marketing and R&D
DigitalOcean’s stock price of $29.61 implies a valuation ratio of 3.3x forward price-to-sales. Check out our free in-depth research report to learn more about why DOCN doesn’t pass our bar.
Citizens Financial Group (CFG)
Share Price: $42.06
Tracing its roots back to 1828 as a community-focused institution, Citizens Financial Group (NYSE:CFG) is a regional bank that provides retail and commercial banking services to individuals, small businesses, and large corporations across 14 states.
Why Are We Cautious About CFG?
- Muted 5.3% annual net interest income growth over the last four years shows its demand lagged behind its bank peers
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 18.5% annually, worse than its revenue
- 1.2% annual tangible book value per share growth over the last five years was slower than its bank peers
At $42.06 per share, Citizens Financial Group trades at 0.8x forward P/B. Dive into our free research report to see why there are better opportunities than CFG.
Brookline Bancorp (BRKL)
Share Price: $10.68
Founded in 1871 and operating through three subsidiary banks across three states, Brookline Bancorp (NASDAQ:BRKL) is a multi-bank holding company that provides commercial, business, and retail banking services to small and mid-sized businesses and individuals in New England and New York.
Why Does BRKL Give Us Pause?
- Net interest income trends were unexciting over the last four years as its 5.7% annual growth was below the typical bank company
- 47.7 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the company’s willingness to accept lower yields to defend its market position
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 20.9% annually
Brookline Bancorp is trading at $10.68 per share, or 0.5x forward P/B. To fully understand why you should be careful with BRKL, check out our full research report (it’s free).
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 6 Stocks for this week. 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-small-cap company Exlservice (+354% 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.