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 that could run into serious trouble.
Two Stocks to Sell:
Hudson Technologies (HDSN)
Trailing 12-Month Free Cash Flow Margin: -13.9%
Founded in 1991, Hudson Technologies (NASDAQ: HDSN) specializes in refrigerant services and solutions, providing refrigerant sales, reclamation, and recycling.
Why Do We Pass on HDSN?
- Annual sales declines of 4.7% for the past two years show its products and services struggled to connect with the market during this cycle
- Waning returns on capital imply its previous profit engines are losing steam
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Hudson Technologies is trading at $5.23 per share, or 0.9x trailing 12-month price-to-sales. To fully understand why you should be careful with HDSN, check out our full research report (it’s free).
EchoStar (SATS)
Trailing 12-Month Free Cash Flow Margin: -7.1%
Following its 2023 acquisition of DISH Network, EchoStar (NASDAQ: SATS) provides satellite communications, pay-TV services, wireless networks, and broadband solutions across consumer and enterprise markets.
Why Should You Dump SATS?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 6.1% annually over the last two years
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
EchoStar’s stock price of $116.50 implies a valuation ratio of 27.1x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including SATS in your portfolio.
One Stock to Watch:
Gevo (GEVO)
Trailing 12-Month Free Cash Flow Margin: -25%
Operating one of the largest dairy-based renewable natural gas facilities in the United States, Gevo (NASDAQ: GEVO) produces sustainable aviation fuel and other renewable hydrocarbon fuels from plant-based feedstocks like corn.
Why Could GEVO Be a Winner?
- Annual revenue growth of 19% over the last ten years was superb and indicates its market share increased during this cycle
- EBITDA profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
At $1.75 per share, Gevo trades at 12.9x forward EV-to-EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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.
