The $10-50 price range often includes mid-sized businesses with proven track records and plenty of growth runway ahead. They also usually carry less risk than penny stocks, though they’re not immune to volatility as many lack the scale advantages of their larger peers.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three stocks under $50 to avoid and some other investments you should consider instead.
Cars.com (CARS)
Share Price: $11.75
Originally started as a joint venture between several media companies including The Washington Post and The New York Times, Cars.com (NYSE:CARS) is a digital marketplace that connects new and used car buyers and sellers.
Why Are We Wary of CARS?
- Increasing competition is redirecting attention to other platforms as it failed to grow its dealer customers over the last two years
- Anticipated sales growth of 2.6% for the next year implies demand will be shaky
- Earnings per share have dipped by 2% annually over the past three years, which is concerning because stock prices follow EPS over the long term
Cars.com’s stock price of $11.75 implies a valuation ratio of 3.3x forward EV/EBITDA. To fully understand why you should be careful with CARS, check out our full research report (it’s free for active Edge members).
Calavo (CVGW)
Share Price: $20.71
A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.
Why Do We Pass on CVGW?
- Sales tumbled by 17.2% annually over the last three years, showing consumer trends are working against its favor
- Modest revenue base of $693.7 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 10.1%
Calavo is trading at $20.71 per share, or 11.7x forward P/E. If you’re considering CVGW for your portfolio, see our FREE research report to learn more.
General Mills (GIS)
Share Price: $47.30
Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE:GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.
Why Are We Hesitant About GIS?
- Shrinking unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Forecasted revenue decline of 3.3% for the upcoming 12 months implies demand will fall off a cliff
- Free cash flow margin dropped by 3.1 percentage points over the last year, implying the company became more capital intensive as competition picked up
At $47.30 per share, General Mills trades at 12.9x forward P/E. Dive into our free research report to see why there are better opportunities than GIS.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% 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
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