Rapid spending isn’t always a sign of progress. Some cash-burning businesses fail to convert investments into meaningful competitive advantages, leaving them vulnerable.

Not all companies are worth the risk, and that’s why we built StockStory - to help you spot the red flags. Keeping that in mind, here is one high-risk, high-reward company with the potential to scale into a market leader and two that may struggle to stay afloat.

Two Stocks to Sell:

PENN Entertainment (PENN)

Trailing 12-Month Free Cash Flow Margin: -2.1%

Established in 1982, PENN Entertainment (NASDAQ: PENN) is a diversified American operator of casinos, sports betting, and entertainment venues.

Why Do We Steer Clear of PENN?

1. Annual revenue growth of 1.4% over the last two years was below our standards for the consumer discretionary sector
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

PENN Entertainment’s stock price of $19.10 implies a valuation ratio of 19.6x forward P/E. Check out our free in-depth research report to learn more about why PENN doesn’t pass our bar.

agilon health (AGL)

Trailing 12-Month Free Cash Flow Margin: -1.2%

Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE: AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.

Why Are We Cautious About AGL?

1. Day-to-day expenses have swelled relative to revenue over the last two years as its adjusted operating margin fell by 3.9 percentage points
2. Negative free cash flow raises questions about the return timeline for its investments
3. Negative returns on capital show management lost money while trying to expand the business

agilon health is trading at $1.23 per share, or 0.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than AGL.

One Stock to Buy:

FTAI Aviation (FTAI)

Trailing 12-Month Free Cash Flow Margin: -64%

With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ: FTAI) sells, leases, maintains, and repairs aircraft engines.

Why Do We Love FTAI?

1. Annual revenue growth of 41.4% over the last two years was superb and indicates its market share increased during this cycle
2. Additional sales over the last two years increased its profitability as the 67% annual growth in its earnings per share outpaced its revenue
3. Cash burn has decreased over the last five years, showing the company is becoming a more self-sustaining business

At $144.55 per share, FTAI Aviation trades at 26.9x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 6 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-small-cap company Comfort Systems (+782% 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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