Red Flags Below is a list of all the red flags – negative signs for buying a stock. Click the links to learn more. Declining Sales and Increasing Debt. Large Goodwill and Intangible Assets. Too Much Debt. Long-Term Decline in Sales. Return on Invested Capital (ROIC) Less than 5%. Company has Bought Numerous Other Decent-Sized Companies Recently. Low Free Cash Flow Margins (<5%). Little Cash. Sharply Increasing Inventory. Cash Balance is Lower than Current Debt. Insider Selling.