In This Article:
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. Keeping that in mind, here is one stock under $50 with huge potential and two that could be down big.
Two Stocks Under $50 to Sell:
Energizer (ENR)
Share Price: $23.09
Masterminds behind the viral Energizer Bunny mascot, Energizer (NYSE:ENR) is one of the world's largest manufacturers of batteries.
Why Do We Steer Clear of ENR?
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Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
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Projected sales growth of 1.3% for the next 12 months suggests sluggish demand
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4.6 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position
Energizer’s stock price of $23.09 implies a valuation ratio of 6.3x forward P/E. Check out our free in-depth research report to learn more about why ENR doesn’t pass our bar.
Winnebago (WGO)
Share Price: $37.99
Created to provide high-quality, affordable RVs to the post-war American family, Winnebago (NYSE:WGO) is a manufacturer of recreational vehicles, providing a range of motorhomes, travel trailers, and fifth-wheel products for outdoor and adventure lifestyles.
Why Is WGO Risky?
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Products and services are facing significant end-market challenges during this cycle as sales have declined by 21.4% annually over the last two years
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Incremental sales over the last five years were much less profitable as its earnings per share fell by 15.2% annually while its revenue grew
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Waning returns on capital imply its previous profit engines are losing steam
At $37.99 per share, Winnebago trades at 8.4x forward P/E. To fully understand why you should be careful with WGO, check out our full research report (it’s free).
One Stock Under $50 to Watch:
DraftKings (DKNG)
Share Price: $37.94
Getting its start in daily fantasy sports, DraftKings (NASDAQ:DKNG) is a digital sports entertainment and gaming company.
Why Is DKNG Interesting?
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Number of monthly unique players has surged, pointing to elevated demand
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Market share will likely rise over the next 12 months as its expected revenue growth of 33% is robust
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Earnings growth has easily exceeded the peer group average over the last five years as its EPS has compounded at 20.7% annually