On the lookout for the best stocks under $50? Then take a look as we have picked 7 attractive stocks that look to be great additions to your portfolio.
If you're new to investing in stocks it can be challenging to find the best stocks sitting at affordable prices that offer great growth prospects. But be rest assured that there are attractive stocks sitting at $50 and under that are looking promising.
Investing in stocks under $50 is not only affordable, compared to some of the biggest companies on the market but these stocks also hold stability in comparison to penny stocks, along with offering great growth potential and can offer good value to investors.
Here we’ll take a look at the key characteristics to determine what makes a good stock under $50, the benefits of adding smaller stocks to your portfolio, along with our hand picked 7 best stocks and how to go about investing into your chosen stock picks.
- Features to look for in stocks under $50
- Risk and rewards of adding small stocks to your portfolio
- 7 best stocks under $50
- Overview: stocks $50 and under
- How to invest in stocks under $50
Features To Look For In Stocks Under $50
When it comes to investing there is no simple method to determine if a stock under $50 is going to create value. But there are key elements to look at when looking to invest in such stocks that could determine which way the stock is heading. Let’s take a look at a few of those stand out characteristics:
Positive growth trends
Compared to large companies, smaller companies hold a stronger advantage when looking to create greater growth. This is due to a number of factors including quicker adaptation to change, resulting in delivering unique and in demand products quicker and secondly, these companies products and services can be more affordable.
Historically smaller companies have outperformed larger companies in terms of quicker growth brought on from their in-house products. When looking to determine if a stock under $50 has good growth prospects take a look at the company's financials including the two main elements, revenue and earnings. These two key characteristics will confirm if a stock has the potential to create good value over a period of time, along with any announcements that a company has shared that looks to create further growth.
Healthy financial position, including lowering debt
The majority of companies that are traded publicly or even over-the-counter (OTC) will hold some level of debt, that’s normal. When looking into a stock of interest take a look at a company's balance sheet to see where the company is sitting financially but most importantly take a look at a stocks debt levels.
It is all well and good if you see a company bringing in the returns but if the company holds a high level of debt that doesn't seem to be reducing, this could be a strong warning sign that a stock is not going to see greater growth opportunities than that of stocks that are actively reducing debt levels to create a better position.
If a stock does hold high debt or when a stock is overleveraged this can signal to be a riskier investment. Having such high liabilities a company may fall behind payments causing a company to go into a downward financial spiral, naturally impacting its shareholders.
Stick to major exchanges when starting out
Just because a stock trades on a public exchange does not necessarily mean that a company can deliver better results than of a stock that doesn’t trade publicly.
But one factor to strongly consider when starting out on your investing journey into any stocks is to stick with companies that trade on public exchanges.
This is due to the requirements that companies have to meet financially in order to trade on these exchanges, making them a less riskier investment than investing in stocks that are not listed publicly on smaller exchanges. Once you find your feet within the investing world nothing is stopping you to invest in good small stock investments that do not trade on a public exchange.
Read Also: 9 Small-Cap Stocks With Growth Potential
Risk And Rewards Of Adding Small Stocks To Your Portfolio
Yes, there are many reasons to invest in small stocks and stick them in your portfolio collection, but there are also strong risk elements to factor into the equation. Let's take a look at the risks and rewards of investing in stocks $50 and under.
- Small-cap stocks can hold high market volatility with large-cap stocks typically outperforming smaller companies. Leading to small-cap stocks being classified as riskier investments than larger stocks.
- Small-cap stocks have less liquidity. This means that buying shares for the right price may be challenging for investors. Additionally, the same can be said when looking to sell shares, with the potential of having less investor attention looking to purchase such shares.
- Beware that small-cap stocks do come with little or no visible data. You will come across this when you look into stocks that are trading on exchanges outside of the public eye. This can be risky and challenging for investors when looking to make an informed evaluation on a stock.
- Lastly, small-cap stocks generally have less capital compared to large-cap stocks. This can be a challenge when stocks look to fund new growth opportunities and pay outstanding liabilities.
- One of the main benefits small-cap stocks hold over large-cap stocks is their growth capabilities. It is more achievable for a small-cap stock to double in size from $1 billion to $2 billion, whereas a large-cap stock that is bringing in a revenue of $20 billion realistically will be much harder to double on this magnitude scale.
- Small-caps stocks do hold a strong element of being undervalued. Since many small-cap stocks do tend to fly under the radar this means that they can also be undervalued when they are more than capable of offering great value to investors.
- Lastly, small-cap stocks can adapt to sudden market changes much quicker than large stocks as these companies are often managed on a smaller scale.
Whether it be for the long-term or short-term approach or perhaps you are looking to take advantage of the changing sudden market. Either or by investing into stocks $50 and under can offer investors the combination of it all including adding diversity to your portfolio by having these little players along with bigger stocks in your collection.
As small-cap stocks can take advantage of sudden price movements within the market, this does come with strong risk factors which is why it pays to know your knowledge by conducting as much research as possible on all of your chosen stock investments under $50.
Check Out: 5 Factors Influencing the Stock Market
7 Best Stocks Under $50
Now we have looked at what constitutes a good stock under $50, now it's time to take a look at 7 of the best stocks available on the market that look to be the perfect smaller additions to be added to your portfolio in 2021.
List of 7 Best Stocks Under $50:
- Cresco Labs Inc (CL)
- Skywest Inc (SKYW)
- MGM Resorts International (MGM)
- Blink Charging Co (BLNK)
- Corsair Gaming Inc (CRSR)
- Slack Technologies Inc (WORK)
- Gap Inc (GPS)
1. Cresco Labs Inc (CL)
As the U.S continues to unfold and approve legalisation of marijuana, Cresco Labs Inc (CL) looks to be one of the smaller cannabis companies that is poised to benefit hugely as more states give cannabis the green light.
In recent days the stock has gained just above 12% and is currently trading at $13.10 -2.98% from its close on 4th May at $13.50.
Despite this recent slight downtrend, the stock holds a 52-week range of 3.34 at its lowest and 17.49 at its highest. Based on 7 analysts predictions the stock may see a 64.23% upside in its share price with an average price target of $21.51.
In light of this slight downturn, this is actually turning out to be a positive note for the cannabis stock when you dig further into the company’s performance over the past year and for what is set to potentially come ahead.
In 2020 the stock achieved record revenue up by 271% to $476.3 million YoY, additionally, the stock hit record adjusted EBITDA of $116.0 million up from $108 million in 2019.
CRLBF also confirmed it is the largest wholesaler of branded products with $274 million being made in wholesale revenue in 2020.
In terms of growth potential CRLBF is looking to be positioned nicely in the thick of an unfolding industry across the U.S. New York state, the most overpopulated city within the United States, recently gave the green light to legalize marijuana usage and holds an estimate that the New York cannabis market could reach $5 billion at its peak. This is good news for Cresco Labs as the stock currently has four medical dispensaries in the city and is looking to expand their real estate facilities to make room for recreational cannabis.
The stocks acquiring plans are also promising as Cresco Labs are leading to the final stages of teaming up with Massachusetts-based Cultivate Licensing LLC and BL Real Estate LLC that will position the stock in the top 3 share position in Massachusetts, deepening the stocks strategic plans and demonstrating great growth prospects as it brings 2 new operating dispensaries and over 42,000 square feet of flowering canopy.
This news comes off the back of the stock's recent acquisition of Florida-based Bluma Wellness Inc (BMWLF) in a deal worth $213 million.
Trying to claim the top spot for market share and sitting in a healthy financial position with being one cannabis stock that is sitting in a profitable position, these are two of many compelling factors that this cannabis stock holds.
Cresco Labs is due to release its first quarter 2021 report on May 27th.
2. Skywest Inc (SKYW)
As the world is on the brink of slowly opening up, Skywest Inc (SKYW) is the name on many investors' minds when looking at the aviation industry.
The holding company for Skywest Airlines who currently has a fleet of over 450 aircrafts connected to over 230 destinations across North America and has partnerships with leading airlines including Delta Air Lines and American Airlines, both of whom are now in receipt of CRJ700 aircrafts with a furthermore 90 in agreement with American Airlines by the end of 2021.
Within the stocks recent Q1 report it was confirmed that improvements are being witnessed with SKYW stock reporting net income of $36 million, or $0.71 per diluted share in Q1 2021, compared to net income of $30 million, or $0.59 per diluted share in Q1 2020.
Despite the stock falling short again within the fourth quarter, which realistically was to be expected, revenue came in at $534.6 million missing the forecast estimate of $539 million for the quarter but the stocks top line also followed suit falling above 25%.
Skywest’s business model is holding up to be one of the best within the industry, especially as regional travel within the U.S has become even more important over the past year. Secondly, it's worth noting that Skywest is also backed by the U.S Treasury and in October was given a loan amount of $725 million to keep operations afloat.
On that note, the stock does hold a high level of debt that you need to be made aware of at $3.1 billion, reduced from $3.2 billion at the end of December 2020 equaliting to a debt-to-equity ratio of 1.24%.
Despite the ups and downs for the stock over the past 15 months, analysts are optimistic for the aviation industry over the coming months giving the stock an average price target of $65.00 showing a potential upside of 30.89% along with revenue showing a potential upside of 16.2% in 2021 to $2.5 billion.
So far Skywest has outperformed the market in 2021 and is continuing its strategy of investing within their fleets and delivering solutions adapting to consumer needs. As the vaccination rollout continues to strengthen, this should continue to open the doors for SKYW to deliver strong results over the coming year and more years ahead.
Read Also: What Are the Top 8 Tourism Stocks To Buy?
3. MGM Resorts International (MGM)
Just like the cannabis industry the U.S sports betting industry is set to become an industry on the brink of explosion and one stock that is looking to be sitting in a rather attractive spot is MGM Resorts International (MGM).
MGM is growing its presence within the world of online betting and iGaming with its BetMGM application, confirming that there is much more to this stock than what meets the eye.
In recent days MGM has surpassed both estimates for revenue and earnings within the first quarter although the stock is still relieving the effects brought on from the COVID-19 pandemic.
MGM managed to gain a revenue of $1.65 billion beating expectations by around 5%, yet is a loss compared to $2.25 billion in revenue a year prior. Switching to the stocks quarterly earnings MGM confirmed a loss of $0.68 per share compared to a loss of $0.45 per share YoY, outbeating Zacks Consensus Estimate of a loss of $0.86 per share, representing an almost 21% earnings surprise.
Analysts have given their verdict giving the stock a consensus EPS estimate of -$1.75 on $8.7 billion showing an almost 70% rise in revenue YoY.
MGM shares are currently up around 34% from the start of 2021 and are currently trading at $41.73 slightly down from its 52 week high of $42.74.
As the company’s BetMGM application has already proven to be a leader within the online betting and iGaming market, MGM China outperforming the market within Q1, along with the company looking to expand its presence within the Asian market in Japan, it looks like MGM looks set to continue to beat estimates for the fifth consecutive time in its next quarter and for potentially many more to come.
4. Blink Charging Co (BLNK)
Electric vehicles are on the way to dominating the roads worldwide and one company that is going to reap the benefits is Blink Charging Co (BLNK).
Blink Charging (BLINK) designs, manufactures, owns and operates EV charging stations globally. As EVs look set to rise over 10 million by 2025, BLINK stock is looking to expand in all locations where demand is strong.
In recent days the stock has entered a long-term agreement with Fatta Hotel Group deploying charging equipment to over 26 locations and it is forecast that more than 25,000 are needed within Israel by 2025. This is just one huge gap in the market for BLNK stock to dominate.
BLNK shares also surged last week after it was announced that the company had signed an agreement with General Motors (GM) looking to continue to establish, enhance and meet consumer needs with public charging points as part of GM’s Ultium Charge 360 program.
This will see Blink Charging and other providers build and provide a network of charging stations to consumers in over 60,000 stations across Canada and the US.
The demand is strong for the stock and within the company’s full year 2020 highlights the company hit $6.2 million in revenue growing by 121% from $2.8 million YoY, with the stocks products and sales being its stand out sector in 2020 with a revenue of $4.4 million from $0.9 million YoY.
Looking ahead the stock is looking like it has plenty of solid visible growth in the pipeline with $221.5 million capital raised in January 2021 in order to strengthen the stocks balance sheet and setting up the stock for its long-term growth plan. Although the company is currently unprofitable it is looking set to becoming profitable within the next three years based on the company’s performances.
The stock is currently trading at $34.67 down by -0.59 from its previous close and down by $29.83 from its 52 week high of $64.50.Three analysts covering the stock have forecast a medium target of $58.00 giving a potential upside of 62.83%, along with a revenue forecast set to grow by 83.99% to $11.5 million over 2021.
Being a solid leader within the EV charging industry BLNK is looking to be one perfect addition to add to your portfolio.
5. Corsair Gaming Inc (CRSR)
If you are not an avid gamer then more than likely you may not be familiar with Corsair Gaming Inc (CRSR). Corsair Gaming Inc (CRSR) is an American computer peripherals and hardware company that designs and sells an array of products from computers to USB flash drives (USBs).
The stock began trading publicly in September 2020 on the Nasdaq exchange and ever since the stock has almost doubled over the past 7 months, even beating predicted targets.
In the stocks recent Q1 report net revenue grew by 71.6% to $529.4 million, adjusted EBITDA grew by 196.6% to a record $80.4 million and a rise in adjusted earnings to $0.58 per diluted share up from $0.45 per share in Q1 2020. The stock's shining results resulted in CRSR taking the no.1 spot in market share within the gaming components category and the NVD Monitors in the U.S and held 41.9% market share in the PC Component market.
In the bigger picture, CRSR reached $1.7 billion in net revenue, an increase of 55.2% year-over-year.
Due to the stocks good performance the company managed to lower debt levels paying off an additional $50 million in debt within Q4, resulting in total net debt repayment of $190 million in 2020. The stock currently holds a total long-term debt of $321.4 million as of 31st December 2020.
The stock is looking to hit further record highs in 2021 and has raised its 2021 guidance for the full year which includes a total revenue guidance in the range of $1.9 billion to $2.1 billion looking to a 23.4% rise in revenue at its peak, adjusted opening income in the range of $235 - $255 million and adjusted EBITDA forecasted in the range of $245 million to $265 million.
The stock is currently trading at $34.00 up by 4.43% from its previous close of $32.59. Whilst analysts have given a consensus ‘Buy’ rating for the stock with an average price target of $47.00, a potential upside of 38.34% with a high estimate of $55.00 and a low estimate of $37.00.
This gaming stock is certainly looking to be a stock that holds many green lights.
Check Out: What Are the Top 7 Best Tech Stocks To Buy
6. Slack Technologies Inc (WORK)
As remote working has become the new way of working for many individuals across the globe, Slack Technologies Inc (WORK) has had a tremendous year over 2020 by enabling consumers to deliver the best work.
From organised conversations to slack calls, individuals can connect to slack team members at any point with any queries or guidance they need in order to excel in their endeavours.
Within the stocks full year 2021 results the company crossed over $1 billion in revenue run rate, equaling to a total full year revenue of $902.6 million, a 43% increase YoY. Within the fourth quarter the stock witnessed an impressive growth in new paid customers adding 14,000 to the list of over 156,000 paid customers in 2020, a 42% rise YoY.
The only point to mention is that the messaging platform is due to be acquired by Salesforce.com (CRM) which is still currently ongoing. This could hold obstacles either way for investors' when seeking to invest within this stock as some may say that the growth prospects are not as strong or on the flip side it could be hugely beneficial.
Nethertheless, Slack Technologies Inc (WORK) is trading at $41.04, trading closely to its 52 week high of $44.57 and is looking to be sitting in a relatively good financial position with $62.2 million free cash flow in 2021 compared to a loss of $62.0 million in 2020.
Even though WORK is looking to be bought out by Salesforce (CRM) mid 2021 this stock is still looking to be attractive and Slack shareholders are even gaining $26.79 in cash and 0.0076 shares of Salesforce stock. Making this stock one to strongly consider.
7. Gap Inc (GPS)
The clothing retail company Gap Inc (GPS) has been one retailer that showed just how resilient the stock can be in challenging times and continues to grow further in 2021.
In recent days GPS has announced that it is looking to sell its channel boutique Intermix including all aspects of the business from e-commerce to leases. The main reason behind this sale is that GPS intends to focus and continue to execute its Power Plan 2023. This is to focus on its powerful portfolio and continue to execute growth of Banana Republic, Athleta, Gap and Old Navy brands providing a solid long-term growth opportunity.
In 2020 the stock reached over $6 billion in online sales with online sales representing 45% of total sales, doubling from 25% in 2019. And this avenue is looking to be a key avenue for the stock within its Power Plan 2023.
Gap is looking to close all underperforming Gap and Banana Republic stores, roughly calculating to around over 100 stores globally, whilst the stock is aiming for its e-commerce side of the business to take the joint center stage in looking to contribute 50% of sales by the recommended time frame in 2023.
On the back of the new changes, GPS has been given a revised A grade for growth by Zacks Investment Research, an A VGM grade and a positive expected earnings per share (EPS) of 12%.
The stocks strategic plan leading up to 2023 is looking like it can re-shape the company for the better in many ways making Gap Inc an attractive buy sitting under $50.
Overview: Stocks $50 And Under
And there you have 7 promising stocks sitting under $50 that look to potentially offer good value to investors over the long term.
To summarise, when looking to invest in stocks you are ultimately buying a share of a company, whether it be a publicly traded company or a stock that trades over-the-counter (OTC). The way in which investors earn returns from stocks is either when a stock appreciates in value or from dividend payouts, or both if you are looking to have a diverse collection.
When specifically looking into stocks under $50 these stocks typically relate to small-cap stocks that hold a market capitalisation of or less than $2 billion. Small-cap stocks do come with strong advantages including higher returns, typically outbeating large-cap stocks, but they also come with stronger risk factors which is why it is wise to always do your due diligence before investing in these stocks.
How To Invest In Stocks Under $50
Now that you are on the verge of looking to enter the world of investing, now it's time to look at opening a trading account with the right broker.
Choosing the right online platform and the right broker is an essential part of your investing journey for many reasons. These reasons include a friendly and easy trading platform, access to various national and international markets, low commission fees and much more.
Once you have chosen your preferred broker and opened an account you are then eligible to invest in your chosen stocks. This will be executed by your broker when looking at buying and selling shares for commissions or fees or in some cases, for free.
It is as simple as that.
When you're ready to begin investing take your time to research various trading platforms and look into what each platform can offer you as an investor, ensuring that you are going to be getting the best trading experience suited around your investing needs.
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