Rapid spending isn’t always a sign of progress. Some cash-burning businesses fail to convert investments into meaningful competitive advantages, leaving them vulnerable.
Negative cash flow can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. Keeping that in mind, here is one high-risk, high-reward company investing aggressively to carve out a leadership position and two to leave off your radar.
Two Industrials Stocks to Sell:
Titan International (TWI)
Trailing 12-Month Free Cash Flow Margin: -1.7%
Acquiring Goodyear’s farm tire business in 2005, Titan (NYSE: TWI) is a manufacturer and supplier of wheels, tires, and undercarriages used in off-highway vehicles such as construction vehicles.
Why Do We Avoid TWI?
- 2.5% annual revenue growth over the last two years was slower than its industrials peers
- Waning returns on capital imply its previous profit engines are losing steam
- 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Titan International’s stock price of $7.46 implies a valuation ratio of 316.8x forward P/E. Read our free research report to see why you should think twice about including TWI in your portfolio.
ChargePoint (CHPT)
Trailing 12-Month Free Cash Flow Margin: -17%
The most prominent EV charging company during the COVID bull market, ChargePoint (NYSE: CHPT) is a provider of electric vehicle charging technology solutions in North America and Europe.
Why Are We Wary of CHPT?
- Annual sales declines of 7.3% for the past two years show its products and services struggled to connect with the market during this cycle
- Negative free cash flow raises questions about the return timeline for its investments
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
ChargePoint is trading at $7.17 per share, or 0.4x forward price-to-sales. To fully understand why you should be careful with CHPT, check out our full research report (it’s free).
One Industrials Stock to Watch:
VSE Corporation (VSEC)
Trailing 12-Month Free Cash Flow Margin: -1.1%
With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ: VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.
Why Are We Fans of VSEC?
- Annual revenue growth of 13.7% over the past two years was outstanding, reflecting market share gains this cycle
- Exciting sales outlook for the upcoming 12 months calls for 66.4% growth, an acceleration from its two-year trend
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
At $175.31 per share, VSE Corporation trades at 38.1x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
