1 Cash-Burning Stock to Target This Week and 2 We Brush Off

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. 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:

Burlington (BURL)

Trailing 12-Month Free Cash Flow Margin: -3.2%

Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.

Why Do We Think Twice About BURL?

1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 8% over the last six years was below our standards for the consumer retail sector
2. Free cash flow margin dropped by 7.5 percentage points over the last year, implying the company became more capital intensive as competition picked up
3. ROIC of 8.5% reflects management’s challenges in identifying attractive investment opportunities

Burlington is trading at $273.13 per share, or 28.5x forward P/E. To fully understand why you should be careful with BURL, check out our full research report (it’s free).

Myriad Genetics (MYGN)

Trailing 12-Month Free Cash Flow Margin: -2.9%

Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ:MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.

Why Should You Dump MYGN?

1. Sales trends were unexciting over the last five years as its 1.8% annual growth was below the typical healthcare company
2. Earnings per share fell by 28.4% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

At $3.89 per share, Myriad Genetics trades at 30x forward P/E. Dive into our free research report to see why there are better opportunities than MYGN.

One Stock to Watch:

VSE Corporation (VSEC)

Trailing 12-Month Free Cash Flow Margin: 1.2%

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 Does VSEC Catch Our Eye?

1. Annual revenue growth of 22.5% over the past two years was outstanding, reflecting market share gains this cycle
2. Operating margin expanded by 5.4 percentage points over the last five years as it scaled and became more efficient
3. Incremental sales over the last five years have been more profitable as its earnings per share increased by 14.2% annually, topping its revenue gains

VSE Corporation’s stock price of $157.30 implies a valuation ratio of 40.2x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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