While some companies burn cash to fuel expansion, others struggle to turn spending into sustainable growth. A high cash burn rate without a strong balance sheet can leave investors exposed to significant downside.
Negative cash flow can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. That said, here is one high-risk, high-reward company investing aggressively to carve out a leadership position and two to leave off your radar.
Two Stocks to Sell:
1-800-FLOWERS (FLWS)
Trailing 12-Month Free Cash Flow Margin: -1%
Founded in 1976, 1-800-FLOWERS (NASDAQ: FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.
Why Are We Out on FLWS?
- Annual revenue declines of 5.5% over the last five years indicate problems with its market positioning
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
1-800-FLOWERS is trading at $4.10 per share, or 0.2x forward price-to-sales. Read our free research report to see why you should think twice about including FLWS in your portfolio.
Wabash (WNC)
Trailing 12-Month Free Cash Flow Margin: -4.6%
With its first trailer reportedly built on two sawhorses, Wabash (NYSE: WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.
Why Do We Avoid WNC?
- Backlog has dropped by 29% on average over the past two years, suggesting it’s losing orders as competition picks up
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Wabash’s stock price of $7.43 implies a valuation ratio of 0.2x trailing 12-month price-to-sales. If you’re considering WNC for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Graham Corporation (GHM)
Trailing 12-Month Free Cash Flow Margin: -2.6%
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE: GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Why Is GHM a Good Business?
- Impressive 15% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Earnings growth has massively outpaced its peers over the last one years as its EPS has compounded at 83.3% annually
- Free cash flow margin grew by 15.4 percentage points over the last five years, giving the company more chips to play with
At $92.96 per share, Graham Corporation trades at 52.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
