DPW Holdings Inc (NYSEAMERICAN:DPW) announced earlier this week that it had acquired debt financing worth $700,000 which will help reduce defense sector order backlog.
The company will use the newly acquired debt financing to refine its efforts aimed at reducing order backlog for businesses operating the defense sector. Such businesses that will benefit from those efforts include Microphase Corporation Inc., Coolisys Technologies, Inc., and its subsidiary Enertec Systems 2001, Ltd. So far these companies have backlog worth $17.5 million out of the total reported for DPW Holdings.
DPW Holdings expects a 28% gross margin from backlog worth $10,500,000 in the fiscal year 2019. The gross profit margin for the remaining backlog worth $7,000,000 is 40%. Coolisys CEO Amos Kohn stated that the move is part of the company’s efforts aimed at boosting profitability and revenue growth to unlock more shareholder value.
“This funding is strategic as it begins our renewed efforts to reduce the value in our backlogged orders and spur our anticipated growth from both new and recurring orders throughout 2019,” stated Kohn.
DPW Holdings plans to unlock more shareholder value by expanding and integrating its operations in the defense sector. Coolisys expects to derive more value from the defense sector revenue in 2019 than it did in 2018. It expects that difference through marginal revenue acquisition and acquisition.
DPW Holdings has secured the funding to boost defense sector businesses through a 10% simple annual interest. Other terms of the deal were revealed through the Form 8-K on December 31 last year.
DPW Holdings stock closed the latest trading session on Thursday, January 3 at 0.12 after losing an 1.53% of the value of the stock during the previous close. The stock’s current 52-week high is $3.6 while its 52-week low is $0.009. This means that the stock is currently closer to the 52-week low.
The recent price surge of December might be a sign that the stock is recovering after a massive bear trend that marked the beginning of 2019 where the stock lost -96.81% of its value. The DPW Holdings stock price was $0.1 on January 1 this year, marking a -6.9% drop that particular day. The value of the company’s stock has dropped by roughly -97.22% in the past 52 weeks.
The poor performance has raised concerns among investors. However, new developments such as the debt financing to ease backlog highlights DPW Holdings’ efforts to improve its performance. This might encourage investors to invest more in the company thus leading to improved stock performance.
Analysts have issued a 2 point recommendation for DPW Holdings on a 1 to 5 scale where 1 is a strong buy and 5 represents a strong sell. The stock registered a 3.4% over the past five years, and analysts estimate 0% EPS growth in the next five years. They also expect a -442.5% EPS growth in 2019.
About DPW Holdings
DPW Holdings is a holding company that invests in firms that are undervalued. It particularly invests in companies that deal with sustainable solutions, disruptive technology, and venture incubation. It invests in a variety of industries including aerospace, medical, textile, hospitality, defense, and telecom industries among others.
The company has been around since 1969 and has since then built up a strong reputation for offering high-quality technology to its clients from different countries. One of the reasons it has existed for quite a long time is that it offers mission-critical solutions to its clientele. The firm is also licensed to offer credit to entrepreneurial businesses and has also built a commercial hospitality property portfolio.