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.
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 avoid and some other investments you should consider instead.
Vestis (VSTS)
Share Price: $7.41
Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE:VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.
Why Should You Sell VSTS?
- Sales tumbled by 2% annually over the last two years, showing market trends are working against its favor during this cycle
- 6.1 percentage point decline in its free cash flow margin over the last four years reflects the company’s increased investments to defend its market position
- High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Vestis’s stock price of $7.41 implies a valuation ratio of 19.6x forward P/E. If you’re considering VSTS for your portfolio, see our FREE research report to learn more.
Neogen (NEOG)
Share Price: $6.09
Founded in 1981 and operating at the intersection of food safety and animal health, Neogen (NASDAQ:NEOG) develops and manufactures diagnostic tests and related products to detect dangerous substances in food and pharmaceuticals for animal health.
Why Do We Pass on NEOG?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.8% 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
- Negative earnings profile makes it challenging to secure favorable financing terms from lenders
Neogen is trading at $6.09 per share, or 18.5x forward P/E. Check out our free in-depth research report to learn more about why NEOG doesn’t pass our bar.
Organon (OGN)
Share Price: $7.30
Spun off from Merck in 2021 to create a company dedicated to addressing unmet needs in women's health, Organon (NYSE:OGN) is a global healthcare company focused on improving women's health through prescription therapies, medical devices, biosimilars, and established medicines.
Why Do We Think Twice About OGN?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.7% annually over the last five years
- Sales were less profitable over the last five years as its earnings per share fell by 17.6% annually, worse than its revenue declines
- Free cash flow margin shrank by 24.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $7.30 per share, Organon trades at 1.9x forward P/E. To fully understand why you should be careful with OGN, check out our full research report (it’s free for active Edge members).
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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