3 Retailer Stocks Under $10 to Avoid: SHLD, SPLS, SVU

A stock selling below $10 a share can be hard to resist, especially when it's attached to a household name.

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A stock selling below $10 a share can be hard to resist, especially when it's attached to a household name. The low price gives an investor a chance to bet on a well-known company for the cost of a meal at McDonald’s.

But just because a stock looks cheap on its face doesn't mean it's a bargain. Often, a recognizable stock trading in the single digits is doing so because the underlying business is in trouble. Besides, you should use even small sums of cash wisely. A loss is a loss, and that money could’ve been put to more profitable use elsewhere.

We’ve identified three prominent companies whose sub-$10 stocks are best avoided by prudent investors. While the shares might seem like a steal, the businesses’ financial outlooks are poor and the stocks appear to be headed for further declines. Consider yourself warned.

(Prices and other data are as of January 27, 2017. Estimates and other figures are from Zacks Investment Research, unless otherwise noted.)

Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.