3 Stocks Under $50 with Warning Signs

The $10-50 price range often includes mid-sized businesses with proven track records and plenty of growth runway ahead. They also usually carry less risk than penny stocks, though they’re not immune to volatility as many lack the scale advantages of their larger peers.

These dynamics can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. That said, here are three stocks under $50 to avoid and some other investments you should consider instead.

International Paper (IP)

Share Price: $37.21

Established in 1898, International Paper (NYSE:IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications.

Why Is IP Risky?

1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 3.9% over the last five years was below our standards for the industrials sector
2. Earnings per share fell by 15.5% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

International Paper is trading at $37.21 per share, or 21.3x forward P/E. If you’re considering IP for your portfolio, see our FREE research report to learn more.

Artivion (AORT)

Share Price: $24.60

Formerly known as CryoLife until its 2022 rebranding, Artivion (NYSE:AORT) develops and manufactures medical devices and preserves human tissues used in cardiac and vascular surgical procedures for patients with aortic disease.

Why Do We Think Twice About AORT?

1. Subscale operations are evident in its revenue base of $458.7 million, meaning it has fewer distribution channels than its larger rivals
2. Poor free cash flow margin of -0.7% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

At $24.60 per share, Artivion trades at 46.4x forward P/E. Check out our free in-depth research report to learn more about why AORT doesn’t pass our bar.

Surgery Partners (SGRY)

Share Price: $16.75

With more than 180 locations across 33 states serving as alternatives to traditional hospital settings, Surgery Partners (NASDAQ:SGRY) operates a national network of outpatient surgical facilities including ambulatory surgery centers and short-stay surgical hospitals.

Why Does SGRY Fall Short?

1. Disappointing unit sales over the past two years suggest it might have to lower prices to accelerate growth
2. Estimated sales growth of 3.2% for the next 12 months implies demand will slow from its two-year trend
3. 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

Surgery Partners’s stock price of $16.75 implies a valuation ratio of 33.8x forward P/E. Read our free research report to see why you should think twice about including SGRY in your portfolio.

High-Quality Stocks for All Market Conditions

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