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. That said, here are three stocks under $50 to avoid and some other investments you should consider instead.
Hormel Foods (HRL)
Share Price: $23.83
Best known for its SPAM brand, Hormel (NYSE:HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.
Why Do We Think HRL Will Underperform?
- Declining unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Gross margin of 16.4% is an output of its commoditized products
- Performance over the past three years shows each sale was less profitable, as its earnings per share fell by 9.2% annually
Hormel Foods is trading at $23.83 per share, or 16.3x forward P/E. If you’re considering HRL for your portfolio, see our FREE research report to learn more.
L.B. Foster (FSTR)
Share Price: $31.63
Founded with a $2,500 loan, L.B. Foster (NASDAQ:FSTR) is a provider of products and services for the transportation and energy infrastructure sectors, including rail products, construction materials, and coating solutions.
Why Does FSTR Fall Short?
- Average backlog growth of 5% over the past two years was mediocre and suggests fewer customers signed long-term contracts
- Issuance of new shares over the last five years caused its earnings per share to fall by 31.4% annually
- ROIC of 3.4% reflects management’s challenges in identifying attractive investment opportunities
At $31.63 per share, L.B. Foster trades at 9.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why FSTR doesn’t pass our bar.
MDU Resources (MDU)
Share Price: $20.80
Founded to provide electricity to towns in Minnesota, MDU Resources (NYSE:MDU) provides products and services in the utilities and construction materials industries.
Why Are We Out on MDU?
- Annual sales declines of 19.5% for the past five years show its products and services struggled to connect with the market during this cycle
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 14.1 percentage points
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
MDU Resources’s stock price of $20.80 implies a valuation ratio of 21.4x forward P/E. Dive into our free research report to see why there are better opportunities than MDU.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. 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.