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Stocks trading in the $1-10 range are generally smaller players with less risk than their penny stock counterparts. But that doesn’t mean the underlying businesses are cheap, and we advise caution as many have questionable fundamentals.

The bad behavior exhibited by lower-quality companies in this space can spook even the most seasoned professionals, which is why we started StockStory - to separate the good from the bad. That said, here are three stocks under $10 to swipe left on and some alternatives you should look into instead.

Leggett & Platt (LEG)

Share Price: $8.93

Founded in 1883, Leggett & Platt (NYSE:LEG) is a diversified manufacturer of products and components for various industries.

Why Do We Think LEG Will Underperform?

1. Sales tumbled by 1.5% annually over the last five years, showing consumer trends are working against its favor

2. Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 15.7% annually, worse than its revenue

3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

At $8.93 per share, Leggett & Platt trades at 8x forward P/E. Dive into our free research report to see why there are better opportunities than LEG.

Pitney Bowes (PBI)

Share Price: $10.11

With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE:PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.

Why Does PBI Worry Us?

1. Sales tumbled by 9% annually over the last five years, showing market trends are working against its favor during this cycle

2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

3. Low returns on capital reflect management’s struggle to allocate funds effectively

To fully understand why you should be careful with PBI, check out our full research report (it’s free).

TPI Composites (TPIC)

Share Price: $1.14

Founded in 1968, TPI Composites (NASDAQ:TPIC) manufactures composite wind turbine blades and provides related precision molding and assembly systems.

Why Do We Steer Clear of TPIC?

1. Customers had second thoughts about committing to its offerings over the past two years as its billings averaged 11.5% declines

2. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

3. EBITDA losses may force it to accept punitive lending terms or high-cost debt