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 downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. Keeping that in mind, here are three stocks under $10 to avoid and some other investments you should consider instead.
Upland Software (UPLD)
Share Price: $1.84
Operating under the mantra "land and expand," Upland Software (NASDAQ: UPLD) provides cloud-based applications that help organizations manage projects, workflows, and digital transformation across various business functions.
Why Are We Wary of UPLD?
- Annual sales declines of 3.4% for the past five years show its products and services struggled to connect with the market
- Sales are projected to tank by 11.1% over the next 12 months as its demand continues evaporating
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 11.1% for the last year
At $1.84 per share, Upland Software trades at 0.2x forward price-to-sales. Check out our free in-depth research report to learn more about why UPLD doesn’t pass our bar.
American Outdoor Brands (AOUT)
Share Price: $6.70
Spun off from Smith and Wesson in 2020, American Outdoor Brands (NASDAQ: AOUT) is an outdoor and recreational products company that offers outdoor and shooting sports products but does not sell firearms themselves.
Why Are We Out on AOUT?
- Annual revenue growth of 2.6% over the last five years was below our standards for the consumer discretionary sector
- Falling earnings per share over the last four years has some investors worried as stock prices ultimately follow EPS over the long term
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
American Outdoor Brands’s stock price of $6.70 implies a valuation ratio of 64x forward P/E. If you’re considering AOUT for your portfolio, see our FREE research report to learn more.
Franklin BSP Realty Trust (FBRT)
Share Price: $9.91
Operating as a specialized real estate investment trust (REIT) with roots dating back to 2012, Franklin BSP Realty Trust (NYSE: FBRT) originates and manages a diversified portfolio of commercial real estate debt investments secured by properties in the United States and abroad.
Why Should You Dump FBRT?
- Annual net interest income growth of 4.4% over the last five years was below our standards for the banking sector
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 39.7% annually while its revenue grew
- Tangible book value per share tumbled by 6.8% annually over the last five years, showing banking sector trends are working against its favor during this cycle
Franklin BSP Realty Trust is trading at $9.91 per share, or 0.7x forward P/B. To fully understand why you should be careful with FBRT, check out our full research report (it’s free for active Edge members).
Stocks We Like More
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
