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.
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 is one stock under $10 with huge potential and two that may have trouble.
Two Stocks Under $10 to Sell:
B&G Foods (BGS)
Share Price: $4.16
Started as a small grocery store in New York City, B&G Foods (NYSE: BGS) is an American packaged foods company with a diverse portfolio of more than 50 brands.
Why Are We Out on BGS?
- Products have few die-hard fans as sales have declined by 3.3% annually over the last three years
- Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable
- High net-debt-to-EBITDA ratio of 7× could force the company to raise capital at unfavorable terms if market conditions deteriorate
B&G Foods is trading at $4.16 per share, or 5.9x forward P/E. Read our free research report to see why you should think twice about including BGS in your portfolio.
E.W. Scripps (SSP)
Share Price: $2.29
Founded as a chain of daily newspapers, E.W. Scripps (NASDAQ: SSP) is a diversified media enterprise operating a range of local television stations, national networks, and digital media platforms.
Why Do We Steer Clear of SSP?
- Lackluster 1.2% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Projected 8.2 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
E.W. Scripps’s stock price of $2.29 implies a valuation ratio of 0.8x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why SSP doesn’t pass our bar.
One Stock Under $10 to Watch:
LegalZoom (LZ)
Share Price: $9.55
Founded by famous lawyer Robert Shapiro, LegalZoom (NASDAQ: LZ) offers online legal services and documentation assistance for individuals and businesses.
Why Are We Positive On LZ?
- Subscription Units have increased by an average of 10.5% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin grew by 13.1 percentage points over the last few years, giving the company more chips to play with
At $9.55 per share, LegalZoom trades at 9.6x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
