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. Keeping that in mind, here are three stocks under $10 to avoid and some other investments you should consider instead.
Zevia (ZVIA)
Share Price: $3.06
With a primary focus on soda but also a presence in energy drinks and teas, Zevia (NYSE: ZVIA) is a better-for-you beverage company.
Why Is ZVIA Not Exciting?
- Sales trends were unexciting over the last three years as its 2% annual growth was below the typical consumer staples company
- Persistent operating losses suggest the business manages its expenses poorly
- Negative free cash flow raises questions about the return timeline for its investments
Zevia is trading at $3.06 per share, or 1.5x forward price-to-sales. If you’re considering ZVIA for your portfolio, see our FREE research report to learn more.
Wabash (WNC)
Share Price: $8.34
With its first trailer reportedly built on two sawhorses, Wabash (NYSE: WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.
Why Should You Sell WNC?
- Demand cratered as it couldn’t win new orders over the past two years, leading to an average 32.8% decline in its backlog
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 13.9%
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 30.5% annually, worse than its revenue
Wabash’s stock price of $8.34 implies a valuation ratio of 8.7x forward P/E. Dive into our free research report to see why there are better opportunities than WNC.
Titan International (TWI)
Share Price: $6.89
Acquiring Goodyear’s farm tire business in 2005, Titan (NSYE:TWI) is a manufacturer and supplier of wheels, tires, and undercarriages used in off-highway vehicles such as construction vehicles.
Why Are We Out on TWI?
- Annual sales declines of 7.4% for the past two years show its products and services struggled to connect with the market during this cycle
- High input costs result in an inferior gross margin of 14% that must be offset through higher volumes
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
At $6.89 per share, Titan International trades at 19.1x forward P/E. To fully understand why you should be careful with TWI, check out our full research report (it’s free).
Stocks We Like More
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 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
