ISW Holdings Inc (OTCMKTS:ISWH) is an interesting case study for small-cap investors in search of speculative ideas with a commercial-stage foundation and growing cash flows from real operations.
The company is already quite diversified, with active commercial interests spanning the wellness, renewable energy, home healthcare, digital colocation, spirits, and cryptocurrency mining sectors. This last point comes courtesy of its recent entrance into a promising Joint Venture partnership with Bit5ive LLC, a global leader in cryptocurrency mining and innovative turnkey mining solutions.
And that may well be where the lion’s share of coming growth is born.
But the breadwinner right now is the company’s home healthcare division, where it has seen somewhat striking expansion on a sequential quarterly basis, including 2019 revenues of well over $500K. Management also noted in a recent release that these results were achieved on accelerating sequential quarterly growth, with nearly half of those revenues appearing in Q4. Sequential growth in Q3 (versus Q2) was 26%. Sequential growth in Q4 (versus Q3) was 29%.
However, according to a shareholder letter out this morning, the company is pursuing an interesting new angle on this recipe for success: telehealth.
The Telehealth Opportunity
Many experts see the telehealth revolution as perhaps the wave of the future, rivaled only by electric cars, big data, AI, and robotics. Healthcare is transforming, with fewer patients set to be treated in hospitals, and more finding their way to home-based care. But the expertise of healthcare workers still has to be part of that equation, which suggests the niche for telehealth services.
Telehealth offers a compelling solution in the current pandemic crisis as well. The more instances where healthcare can be delivered without placing healthcare workers in contact with potentially contagious carriers of the virus, the better off we will all be. Patients can avoid exposure to infection at medical facilities and healthcare providers can avoid exposure to potentially contagious patients.
And that’s exactly why we have seen a dramatic deregulation around telehealth in recent months, further opening the door for its long-term ascendancy as a transformative concept in the healthcare sector.
Some of the key steps we have seen include the expansion of telehealth services covered by Medicare, a lowering of the strict HIPAA bar for clinical interactions with patients over digital platforms, and a broad dismantling of interstate barriers – healthcare providers no longer need to be licensed in the patient’s state.
On that note, ISWH’s president, Alonzo Pierce, noted in his letter to shareholders this morning that: “Our TeleCare service is one of the initiatives we are most excited about right now. This is a new technology solution we are preparing to launch as part of our Home Healthcare service. TeleCare is a revolutionary technology solution designed to provide home health patients with a simple, one-button wearable device to quickly and easily summon a visiting nurse, home health provider, or 24/7 nurse assist hotline anytime medical assistance is urgently needed. It works just like the nurse call button at the hospital. Our research suggests this will create tremendous additional value and enhance our clients’ lives by helping them to maintain the greatest possible level of independent existence while still having access to the supportive care they need.”
The Crypto Opportunity
On the Crypto side, ISW Holdings Inc (OTCMKTS:ISWH) recently partnered up through its new joint venture with Bit5ive LLC, a global leader in cryptocurrency mining and innovative turnkey mining solutions.
According to the release, Bit5ive is an official distribution partner of Bitmain, the industry-leading fabless manufacturer of computing chips and distributor of Antminers to more than 30 countries in Latin America, Central America, and the Caribbean. In addition, Bit5ive is the producer and distributor of POD5 and Power Skid 2.5, the most efficient and successful infrastructure for crypto mining hardware. Bit5ive is quickly becoming one of the largest U.S.-based companies in the cryptocurrency mining and bitcoin farm industry.
According to this morning’s shareholder letter: “The timing of the deal looks great from a macro standpoint given signals we are seeing that point to cyclical strength in demand for crypto mining hardware and resources after the space was washed out by the bear market in coin prices in 2018. We have started to see a growing number of deals in recent weeks that point to a strong tailwind as we begin to position ISW in the thick of that market this summer. In short, we are very excited about our Bit5ive joint venture and we look forward to updating shareholders each step of the way as benchmarks are achieved and we move toward initial revenues in this arena.”
In other words, the context is ripe for a quick harvest in terms of topline growth in this space, and we might even go so far as to say that some deals have already been lined up, by the suggestive tone to that last sentence. Time will tell.
