ISW Holdings Inc (OTCMKTS:ISWH) shares have been rocketing higher over the past two months, up over 1,500% on strong volume and liquid price action. It’s not too difficult to understand why.
This is a Bitcoin Stock. But it’s also a company seeing increasingly promising real financial performance in a space where very few options exist.
The strong quarterly report trend – it has seen seven consecutive quarters of sequential double-digit percentage topline growth, growing cash on the balance sheet, and several EBITDA positive report cards in the books – is due to its Telehealth segment, but it is rounding the corner to commercializing its cryptocurrency mining and mining equipment segment this quarter, according to company information.
That brings us to a more in-depth examination of the story and where it may be headed next, especially as Bitcoin draws shocked eyeballs on wild parabolic upward action.
The Piper Gets Paid
For Bitcoin bears, the action has been devastating – and there are certainly plenty of them out there. “The digital currency revolution is a pipedream!” “You can’t have money I can’t touch!” “It can be hacked!” “The government will shut it down!”
ISW Holdings Inc (OTCMKTS:ISWH) started betting on Bitcoin in 2018 and 2019. In March 2019, it started putting its cash into the digital currency when it was just $4K/coin, very near the absolute bottom of the 2017-18 bear market in the cryptocurrency.
It has since continued to make that strategic allocation decision, with its latest move augmenting that strategy with another $20K last week.
ISW Holdings Inc (OTCMKTS:ISWH) also recently put out an interesting corporate update that made several big points abundantly clear: the company is entering the new year with strong growth, a streamlined share structure, and big plans for 2021.
In that release, the company noted that it has completed testing of its state-of-the-art datacenter pod (the Proceso Pod5ive datacenter), designed in partnership with Bit5ive.
“We are very excited about our design of this pod and its market-leading efficiency score,” said Alonzo Pierce, President and Chairman of ISW Holdings, Inc. “Our plan is to have two additional pods by the end of March 2021, with a milestone goal of 10 pods by December 31, 2021.”
According to the release, Pierce noted that each pod has the capacity to generate $900,000 per year (at current cryptocurrency prices), with a goal of 10 pods, which, at today’s cost, can generate almost $10 million in revenues annually, with a 3-year goal of 50 pods generating $45 million per year.
In addition, ISWH, as of late December, was reportedly on pace to post its 7th consecutive quarter of sequential quarterly growth when Q4 ended on Dec. 31. That has presumably happened and we will see it on the report card in due time.
Fueling that performance, the company’s telehealth and home healthcare division has been responsible for the lion’s share of that streak, and it is poised to post over $1 million in sales in 2020. Based on increasing client and caretaker numbers, the Company now expects this segment to post over $3 million on the topline in 2021. That doesn’t take into account expected growth from its cryptocurrency segment.
Finally, the company also noted its stockholders have returned almost 8.5 million shares in certificate form to the company which are being returned to the treasury thus resulting in a 15% reduction in the shares outstanding. This action comes on the heels of a pair of shareholder friendly moves, the elimination of $702K in convertible debt and a 420 million reduction in the authorized shares to just 60 million.
“We are committed to laying a fresh shareholder-friendly foundation for ISWH as we start to see strong fundamental growth and continued upward projections begin to dominate the near- and intermediate-term horizon for the Company,” Pierce said.
The point here is that this is a bitcoin stock with an operational cash flow engine uncorrelated to the price of the coin. That’s a rare advantage in this space.