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. That said, here are three stocks under $10 to avoid and some other investments you should consider instead.
PlayStudios (MYPS)
Share Price: $0.94
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ: MYPS) offers free-to-play digital casino games.
Why Are We Out on MYPS?
- Number of daily active users has disappointed over the past two years, indicating weak demand for its offerings
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
PlayStudios’s stock price of $0.94 implies a valuation ratio of 2.7x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including MYPS in your portfolio.
Hanesbrands (HBI)
Share Price: $6.86
A classic American staple founded in 1901, Hanesbrands (NYSE: HBI) is a clothing company known for its array of basic apparel including innerwear and activewear.
Why Do We Think HBI Will Underperform?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 18% annually, worse than its revenue
At $6.86 per share, Hanesbrands trades at 10.4x forward P/E. To fully understand why you should be careful with HBI, check out our full research report (it’s free for active Edge members).
Purple (PRPL)
Share Price: $0.85
Founded by two brothers, Purple (NASDAQ: PRPL) creates sleep and home comfort products such as mattresses, pillows, and bedding accessories.
Why Should You Dump PRPL?
- Products and services have few die-hard fans as sales have declined by 2.9% annually over the last five years
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Purple is trading at $0.85 per share, or 6.8x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why PRPL doesn’t pass our bar.
Stocks We Like More
Trump’s April 2025 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 9 Market-Beating Stocks. 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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