Investors can certainly boost their returns by concentrating on stocks trading between $1 and $10. However, a disciplined approach is necessary because many of these businesses are speculative and lack the underlying fundamentals to support their prices.
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.
Petco (WOOF)
Share Price: $2.93
Historically known for its window displays of pets for sale or adoption, Petco (NASDAQ:WOOF) is a specialty retailer of pet food and supplies as well as a provider of services such as wellness checks and grooming.
Why Do We Think WOOF Will Underperform?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Issuance of new shares over the last three years caused its earnings per share to fall by 42% annually
- High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $2.93 per share, Petco trades at 14.2x forward P/E. If you’re considering WOOF for your portfolio, see our FREE research report to learn more.
JELD-WEN (JELD)
Share Price: $2.97
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE:JELD) manufactures doors, windows, and other related building products.
Why Should You Sell JELD?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
JELD-WEN is trading at $2.97 per share, or 11.3x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than JELD.
Alight (ALIT)
Share Price: $1.53
Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE:ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.
Why Do We Steer Clear of ALIT?
- Sales tumbled by 3.1% annually over the last five years, showing market trends are working against its favor during this cycle
- Earnings per share have dipped by 5% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Alight’s stock price of $1.53 implies a valuation ratio of 2.6x forward P/E. To fully understand why you should be careful with ALIT, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.