Why ISWH is a Bargain Waiting to be Tapped

ISW Holdings Inc (OTCMKTS:ISWH) is trading at $0.20 per share as one of the only pure-play leaders in outpatient care in a region currently being hard hit by COVID-19 – with active outpatient healthcare across major metropolitan centers in the State of Texas, including Houston, San Antonio, and El Paso. Given the crisis we are currently seeing for in-patient hospital care, due to the droves of coronavirus patients being forced into intensive care right now, it’s difficult to believe the stock has yet to be picked up by the momentum trading crowd.

That said, it wouldn’t be surprising to see this change, especially following the latest data from the company on its financial performance in the second half of 2019 and so far in 2020.

ISW Holdings Inc (OTCMKTS:ISWH) is experiencing one of the most desirable qualities for momentum growth investing: undervalued pricing on a per-share basis during accelerating double-digit sequential quarterly growth. In other words, it’s cheap on a price-to-sales basis (0.5x forward sales) and growing by more than 10% on the top-line each quarter, with each quarter growing on a quarter-over-quarter basis faster than the last. And it’s a lot faster than 10%.

Based on the company’s recent communications, we would assume over 30% in Q1 2020, and possibly over 40% in Q2 – note that these are our guesstimates based on the data the company just put out, and we can’t confirm their validity.

Naturally, we aren’t talking about big numbers here, so rapid growth is not wildly unusual. But it generally isn’t something you see – at least, not at this rate for a company on pace to drive 7-digit sales – in a company that isn’t “working” as an investable opportunity.

If there’s a flaw here, it’s that we don’t know a whole lot about margins, and we don’t know how long the crisis will last – hopefully not much longer, but certainly for hospitals, a lot longer than anyone wants to see.


The Big Story

ISW Holdings Inc (OTCMKTS:ISWH) bills itself as a global brand management holdings company with diverse operational interests, including commercial-stage operations in the spirits, CBD, and home healthcare markets, and development-stage operations in the logistics and supply chain and renewable energy markets.

But the source of the company’s strong data is firmly centered in its home healthcare operations.

In its most recent and most important recent release, the company notes that the company brought in over $527k in sales in 2019, with the vast majority of it skewed in the back half of the year, with accelerating growth in each quarter. The company also said it saw Q1 2020 growth jumping relative to Q4 2019, and that the growth was set to continue in Q2 2020.

“We are all in this together,” commented Alonzo Pierce, President of ISW Holdings. “As far as performance, we hope current and prospective shareholders understand that we are expanding to catch up with an accelerating flood of demand in our home healthcare segment. We are on pace for easily our best year in Company history. We are also on the verge of an announcement that will qualitatively bolster that trajectory, and we will have more details on that very soon.”



We also like this story because the growth we are seeing is organic, but will likely be augmented by operational expansion on a regional basis in coming months as well.

As detailed in recent releases, the company has begun the process of expanding its home healthcare operations outside of the state of Texas, moving into in Nevada (Las Vegas and Reno), New Mexico (Santa Fe), Arizona (Phoenix), and Florida (The Villages). As part of that process, the company has started to get registered agents in place and gather regulatory paperwork to begin establishing operations.

What has worked in Texas is likely to work at least as well in New Mexico, Arizona, and Florida, where average age – and thus vulnerability – is likely higher.

“We are poised to dramatically scale up where it will count most,” commented Alonzo Pierce, President of ISWH. “Our home healthcare business has demonstrated viability and raw growth over a series of consecutive quarters. That business has developed so rapidly that it’s impossible for any responsible management strategy to call for anything but hitting the gas pedal. In the very near future, we expect to be operating a rapidly growing home healthcare business with operations spanning five states, with shares transacting on the OTCQB exchange tier, and with a new corporate name that better reflects our operations and future vision.”

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