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.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.

Knowles (KN)

Share Price: $21.57

With roots dating back to 1946 and a focus on components that must perform flawlessly in critical situations, Knowles (NYSE: KN) designs and manufactures specialized electronic components like high-performance capacitors, microphones, and speakers for medical technology, defense, and industrial applications.

Why Is KN Risky?

1. Sales tumbled by 5.3% annually over the last five years, showing market trends are working against its favor during this cycle
2. Subscale operations are evident in its revenue base of $563.1 million, meaning it has fewer distribution channels than its larger rivals
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up

At $21.57 per share, Knowles trades at 17.8x forward P/E. If you’re considering KN for your portfolio, see our FREE research report to learn more.

Lincoln Financial Group (LNC)

Share Price: $41.94

Founded in 1905 by a group of Fort Wayne, Indiana businessmen who named the company after Abraham Lincoln, Lincoln National Corporation (NYSE: LNC) provides insurance, retirement plans, and wealth management products through its subsidiaries, operating under four main segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services.

Why Do We Steer Clear of LNC?

1. Sales stagnated over the last five years and signal the need for new growth strategies
2. Insurance offerings faced market headwinds this cycle, reflected in stagnant net premiums earned over the last two years
3. Annual book value per share declines of 15.9% for the past five years show its capital management struggled during this cycle

Lincoln Financial Group’s stock price of $41.94 implies a valuation ratio of 0.9x forward P/B. Dive into our free research report to see why there are better opportunities than LNC.

Starwood Property Trust (STWD)

Share Price: $20.28

With a diverse portfolio spanning commercial properties, residential mortgages, infrastructure loans, and real estate servicing, Starwood Property Trust (NYSE: STWD) is a real estate investment trust that originates, acquires, and manages commercial mortgages, residential loans, and other real estate investments.

Why Do We Avoid STWD?

1. Sales tumbled by 6% annually over the last two years, showing market trends are working against its favor during this cycle
2. Net interest income tumbled by 2.5% annually over the last four years, showing market trends are working against its favor during this cycle
3. Loan losses and capital returns have eroded its tangible book value per share this cycle as its tangible book value per share declined by 4.1% annually over the last two years

Starwood Property Trust is trading at $20.28 per share, or 1.1x forward P/B. Check out our free in-depth research report to learn more about why STWD doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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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