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.
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 are three stocks under $50 to avoid and some other investments you should consider instead.
Douglas Dynamics (PLOW)
Share Price: $28.80
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE: PLOW) offers snow and ice equipment for the roads and sidewalks.
Why Do We Pass on PLOW?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Earnings per share fell by 2.4% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- 5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Douglas Dynamics’s stock price of $28.80 implies a valuation ratio of 14.8x forward P/E. If you’re considering PLOW for your portfolio, see our FREE research report to learn more.
National Bank Holdings (NBHC)
Share Price: $35.85
Operating under familiar local brands like Community Banks of Colorado, Bank Midwest, and Bank of Jackson Hole, National Bank Holdings (NYSE: NBHC) operates regional banks across Colorado, Kansas, Missouri, Wyoming, Texas, and other western states, offering commercial, business, and consumer banking services.
Why Does NBHC Give Us Pause?
- Muted 3.8% annual revenue growth over the last two years shows its demand lagged behind its bank peers
- Overall productivity is expected to decrease over the next year as Wall Street thinks its efficiency ratio will degrade by 2.1 percentage points
- 4% annual tangible book value per share growth over the last five years was slower than its bank peers
At $35.85 per share, National Bank Holdings trades at 1x forward P/B. To fully understand why you should be careful with NBHC, check out our full research report (it’s free).
Columbia Banking System (COLB)
Share Price: $22.48
Created through the merger of two Pacific Northwest banking institutions with deep regional roots, Columbia Banking System (NASDAQ: COLB) operates Umpqua Bank, providing commercial, consumer, and wealth management services across eight western states.
Why Do We Think Twice About COLB?
- Estimated net interest income growth of 2.3% for the next 12 months implies demand will slow from its four-year trend
- Performance over the past five years shows its incremental sales were less profitable, as its 2.9% annual earnings per share growth trailed its revenue gains
- Annual tangible book value per share declines of 1.2% for the past five years show its capital management struggled during this cycle
Columbia Banking System is trading at $22.48 per share, or 0.9x forward P/B. Check out our free in-depth research report to learn more about why COLB doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out 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 Comfort Systems (+782% 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
