3 Stocks Under $10 Facing Headwinds

Stocks under $10 pique our interest because they have room to grow (as well as the most affordable option contract premiums). That doesn’t mean they’re bargains though, and we urge investors to be careful as many have risky business models.

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. Keeping that in mind, here are three stocks under $10 to avoid and some other investments you should consider instead.

Beyond Meat (BYND)

Share Price: $2.33

A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ:BYND) is a food company specializing in alternatives to traditional meat products.

Why Are We Out on BYND?

1. Falling unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

At $2.33 per share, Beyond Meat trades at 0.6x forward price-to-sales. If you’re considering BYND for your portfolio, see our FREE research report to learn more.

Quest Resource (QRHC)

Share Price: $2.42

Recycling corporate waste to help companies be more sustainable, Quest Resource (NASDAQ:QRHC) is a provider of waste and recycling services.

Why Do We Avoid QRHC?

1. Sales were flat over the last two years, indicating it’s failed to expand this cycle
2. 6.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Quest Resource is trading at $2.42 per share, or 6.3x forward P/E. Check out our free in-depth research report to learn more about why QRHC doesn’t pass our bar.

Owens & Minor (OMI)

Share Price: $6.95

With roots dating back to 1882 and operations spanning approximately 80 countries, Owens & Minor (NYSE:OMI) is a healthcare solutions company that manufactures medical supplies, distributes products to healthcare providers, and delivers medical equipment directly to patients.

Why Are We Cautious About OMI?

1. Annual sales growth of 3.2% over the last two years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
2. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its decreasing returns suggest its historical profit centers are aging
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Owens & Minor’s stock price of $6.95 implies a valuation ratio of 3.9x forward P/E. Read our free research report to see why you should think twice about including OMI in your portfolio.

Stocks We Like 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 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.