With the COVID-19 outbreak now fully established as the dominant force driving investment flows either north or south, depending sector and theme, we wanted to take a look at International Spirits & Wellness Holdings, Inc. (OTCMKTS:ISWH) given the company’s recent explosion in growth as a Texas home healthcare player, as well as the company’s announcements detailing its rapidly progressing move to expand into four new states. The home healthcare play is another industry that may see explosive growth based on the coronavirus pandemic as traditional healthcare facilities are inevitably set for overwhelming demand.
The case for home healthcare plays as beneficiaries of the coronavirus boom is relatively straightforward: hospitals are already preparing to discharge chronically ill and disabled patients that would otherwise be receiving continued inpatient care because the hospital system, itself, is being forced to undergo a sort of system-wide triage in resources as the flood of COVID-19 cases starts to enter the picture.
Right Place, Right Time
International Spirits & Wellness Holdings, Inc. (OTCMKTS:ISWH) is perfectly positioned to pick up the slack. The company is already flourishing in the Houston, San Antonio, and El Paso metropolitan areas, and it is rapidly progressing toward a launch of operations in a number of additional major population hubs (Las Vegas, Reno, Santa Fe, Phoenix, and The Villages) in as many as four new states. We wouldn’t be surprised to see the expansion continue to other areas with a similar profile.
This is a company that has real operations in major metropolitan areas as a home healthcare provider. The home healthcare segment has booked hundreds of thousands of dollars in revenues over the past few quarters on dramatic growth (nearly 15,000% growth on the topline over the past 6 months). And by all accounts, one would expect that growth rate to ramp up by a considerable further margin given both the expansion in markets and the overflow demand as hospitals triage resources to COVID-19 cases.
The company has also indicated that it might be able to assist in executing COVID-19 testing procedures, which would be a very welcome development to hospitals and surrounding communities.
We see this as a core coronavirus investment opportunity over the next 12 months, and maybe further out. Since there are real revenues and operations – rather than just an empty promise or “plan” – coming events should ultimately seed growing interest here as this theme continues to mature as a dominant preoccupation for the markets.
Given the seeming inevitability of a substantial coronavirus outbreak that could affect 20-40% of the US population, hospitals will be overburdened, and people will widely prefer to avoid traditional medical facilities for other health concerns to reduce the odds of infection. That opens the door for a boom in the home healthcare industry. ISWH is one of the only micro-caps in the publicly traded markets with a history of success in that space.
Locked and Loaded
As discussed above, ISWH is primed as a coronavirus play that has yet to catch the full attention of the momentum crowd. But given the company’s existing footprint of real revenues in the home healthcare space and its progressing path toward wide expansion, this may just be a matter of time. And, given the stock’s tiny float (less than a million shares), that prospect suggests a dramatic upside potential if and when it takes hold.
At this point, the stock has been trekking sideways in recent action. But the $0.50/share area is particularly ripe as a possible breakout zone if triggered by a move above that area. From there, momentum could build on itself in violent fashion.
We would also note that all of this comes on the heels of a “shareholder friendly” restructuring and reverse split to normalize the share price and dramatically tighten the float.
“A shareholder-friendly restructuring was necessary to strengthen our relationship with capital markets, pursue a near-term uplist to a higher exchange tier, and set in motion our operational strategy for 2020,” commented Alonzo Pierce, President and Chairman of ISWH. “We have a number of very compelling catalysts set to roll out, but we needed to provide a viable context – to lay a foundation for that success – as an initial step. We have achieved that with our restructuring and reverse split last week.”
This leaner, lighter cap structure offers traders and investors a new playing field free from the encumbrance of dilutive forces and an oppressive share supply, which has obvious positive implications for new investors as long as they get in ahead of a crowd rush.
Naturally, all of this lines up well when one looks at the current crisis. The market appears to be going through a series of different concentrated thematic booms: the pandemic equipment suppliers, the vaccine and therapeutics names, the testing kit distributors, telehealth, workplace virtualization and remote meeting technology. It’s one after another. It’s not difficult to see outpatient healthcare folding into that narrative in an extremely tidy manner.
ISWH fits that bill, and we would expect coming catalysts from the company that start to make it hard to miss.
