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. Keeping that in mind, here are three stocks under $10 to swipe left on and some alternatives you should look into instead.
8x8 (EGHT)
Share Price: $2.48
Named after its founding year (1987) with "8x8" representing binary code for communications, 8x8 (NASDAQ:EGHT) provides cloud-based contact center and unified communications solutions that enable businesses to manage customer interactions and internal communications through a single platform.
Why Should You Dump EGHT?
- Offerings struggled to generate meaningful interest as its average billings growth of 2.4% over the last year did not impress
- Sales are projected to be flat over the next 12 months and imply weak demand
- Efficiency rose over the last year as its Operating margin increased by 2.1 percentage points
At $2.48 per share, 8x8 trades at 0.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than EGHT.
Coty (COTY)
Share Price: $2.64
With a portfolio boasting many household brands, Coty (NYSE:COTY) is a beauty products powerhouse spanning cosmetics, fragrances, and skincare.
Why Do We Steer Clear of COTY?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Earnings per share fell by 29.3% annually over the last three years while its revenue grew, showing its incremental sales were much less profitable
- Underwhelming 2.2% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging
Coty is trading at $2.64 per share, or 7.9x forward P/E. To fully understand why you should be careful with COTY, check out our full research report (it’s free).
American Express Global Business Travel (GBTG)
Share Price: $9.35
Originally spun off from American Express in 2014 but maintaining the Amex GBT brand, Global Business Travel Group (NYSE:GBTG) provides end-to-end business travel and expense management solutions, connecting corporate clients with travel suppliers and offering specialized software services.
Why Does GBTG Give Us Pause?
- Revenue increased by 12.5% annually over the last two years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
- Sky-high servicing costs result in an inferior gross margin of 59% that must be offset through increased usage
- Efficiency has decreased over the last year as its operating margin fell by 2.2 percentage points
American Express Global Business Travel’s stock price of $9.35 implies a valuation ratio of 1.5x forward price-to-sales. If you’re considering GBTG for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
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