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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 dynamic 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 is one stock under $50 with huge potential and two that could be down big.

Two Stocks Under $50 to Sell:

CSX (CSX)

Share Price: $29

Established as part of the Chessie System and Seaboard Coast Line Industries merger, CSX (NASDAQ:CSX) is a transportation company specializing in freight rail services.

Why Do We Think CSX Will Underperform?

1. Flat unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy

2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

3. 17 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

CSX is trading at $29 per share, or 15.1x forward price-to-earnings. Read our free research report to see why you should think twice about including CSX in your portfolio, it’s free.

QuidelOrtho (QDEL)

Share Price: $33.46

Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ:QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.

Why Are We Out on QDEL?

1. Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers

2. Free cash flow margin shrank by 20.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

3. Diminishing returns on capital suggest its earlier profit pools are drying up

QuidelOrtho’s stock price of $33.46 implies a valuation ratio of 14.7x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than QDEL.

One Stock Under $50 to Buy:

AZEK (AZEK)

Share Price: $49.07

With a significant portion of its products made from recycled materials, AZEK (NYSE:AZEK) designs and manufactures goods for outdoor living spaces.

Why Are We Bullish on AZEK?

1. Average organic revenue growth of 10.7% over the past two years demonstrates its ability to expand independently without relying on acquisitions

2. Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient

3. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 41.3% exceeded its revenue gains over the last two years