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.
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.
CoreCivic (CXW)
Share Price: $20.35
Originally founded in 1983 as the first private prison company in the United States, CoreCivic (NYSE: CXW) operates correctional facilities, detention centers, and residential reentry programs for government agencies across the United States.
Why Do We Think Twice About CXW?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Demand for its offerings was relatively low as its number of average available beds has underwhelmed
- Low returns on capital reflect management’s struggle to allocate funds effectively
CoreCivic is trading at $20.35 per share, or 16.5x forward P/E. Dive into our free research report to see why there are better opportunities than CXW.
CNA Financial (CNA)
Share Price: $46.46
With roots dating back to 1853 and majority ownership by Loews Corporation, CNA Financial (NYSE: CNA) is a commercial property and casualty insurance provider offering coverage for businesses, including professional liability, surety bonds, and specialized risk management services.
Why Should You Dump CNA?
- Large revenue base constrains its growth potential, as seen in its unexciting 7.4% annualized increases in net premiums earned over the last five years fell below our expectations for the insurance sector
- Annual earnings per share growth of 5.7% underperformed its revenue over the last two years, showing its incremental sales were less profitable
- Annual book value per share declines of 1.7% for the past five years show its capital management struggled during this cycle
CNA Financial’s stock price of $46.46 implies a valuation ratio of 0.8x forward price-to-sales. If you’re considering CNA for your portfolio, see our FREE research report to learn more.
Sallie Mae (SLM)
Share Price: $27.13
Originally created as a government-sponsored enterprise before privatizing in 2004, Sallie Mae (NASDAQ: SLM) is a financial services company that provides private education loans, savings products, and educational resources to help students and families pay for college.
Why Does SLM Worry Us?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.6% annually over the last five years
At $27.13 per share, Sallie Mae trades at 9.1x forward P/E. Read our free research report to see why you should think twice about including SLM in your portfolio.
High-Quality Stocks for All Market Conditions
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