Stocks trading in the $1-10 range are generally smaller players with less risk than their penny stock counterparts. But that doesn’t mean the underlying businesses are cheap, and we advise caution as many have questionable fundamentals.
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. That said, here are three stocks under $10 to avoid and some other investments you should consider instead.
Jamf (JAMF)
Share Price: $8.13
Founded in 2002 by Zach Halmstad and Chip Pearson, right around the time when Apple began to dominate the personal computing market, Jamf (NASDAQ: JAMF) provides software for companies to manage Apple devices such as Macs, iPads, and iPhones.
Why Does JAMF Fall Short?
- Annual revenue growth of 17.7% over the last three years was below our standards for the software sector
- Offerings struggled to generate meaningful interest as its average billings growth of 8.9% over the last year did not impress
- Suboptimal cost structure is highlighted by its history of operating margin losses
Jamf is trading at $8.13 per share, or 1.6x forward price-to-sales. Read our free research report to see why you should think twice about including JAMF in your portfolio.
Methode Electronics (MEI)
Share Price: $6.65
Founded in 1946, Methode Electronics (NYSE: MEI) is a global supplier of custom-engineered solutions for Original Equipment Manufacturers (OEMs).
Why Do We Avoid MEI?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 5.7% annually over the last two years
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Methode Electronics’s stock price of $6.65 implies a valuation ratio of 9.9x forward P/E. If you’re considering MEI for your portfolio, see our FREE research report to learn more.
NN (NNBR)
Share Price: $2.10
Formerly known as Nuturn, NN (NASDAQ: NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.
Why Is NNBR Risky?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.3% annually over the last five years
- Sales were less profitable over the last five years as its earnings per share fell by 17.5% annually, worse than its revenue declines
- Cash-burning history and the downward spiral in its margin profile make us wonder if it has a viable business model
At $2.10 per share, NN trades at 313.8x forward P/E. Check out our free in-depth research report to learn more about why NNBR doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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-micro-cap company Tecnoglass (+1,754% 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
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