By Ernest Dela Aglanu, Benzinga
Since 2019 when DSS Inc. (NYSE American: DSS) embarked on a major transformation journey, the company has evolved into a multinational company operating businesses in nine divisions with over 40 subsidiaries.
Headquartered in New York, the company has developed strong market positions in product packaging, biotechnology, direct marketing, commercial lending, securities, and investment management, alternative trading, digital transformation, secure living, and alternative energy.
These nine divisions and 40 subsidiaries offer innovative, flexible, and real-world solutions that not only provide mutual benefits for businesses and their customers but also create sustainable value and opportunity for transformation and value creation
A study of the company’s website and investor deck reveals growth in diverse market sectors which is being fueled by an “incubator” strategy of acquiring and developing assets to enhance shareholder value through calculated IPO spinoffs and a parametric share distribution strategy.(??)
A Closer Look At DSS’s Financials
This strategy appears to be having a positive impact on DSS’s financials. A due diligence dive into the company’s financials show that the company’s total Net Asset Value (NAV) as of September 30 last year was $182.6 million, or $1.31 NAV per Share. Third Quarter 2022 revenues ballooned astronomically by 172% Quarter to Quarter, total assets were valued at $264 million, up significantly from the $20 million in assets as of December 2019.
As of March 10th, 2023, DSS’s Market Cap was $33.5 million ($0.24/share) meaning shares are trading at approximately an 80% discount from September 30th’s NAV per share of $1.31.
The company’s revenue for Q3 2022 was more than $35.9 million, compared to $13.2 million in the same quarter of 2021, representing a 170% increase.
Market Potential Could Be Massive
DSS believes that the markets the company operates in have nearly unlimited potential, and the opportunities within multiple high-growth markets are endless, predominantly because entities within these sectors are contemporary, scalable, and offer recurring revenue streams.
Product packaging is projected to surpass $1.3 trillion in market size by 2028. The biotechnology market is expected to be worth around $3.44 trillion by 2030.
Direct Marketing is a global business generating approximately $180 billion and is projected to have its fifth year of double-digit growth in 2023 spurred by the new Gig Economy.
Commercial Lending Growth was at a 14-Year High in 2022, and the market size valued at over $8 billion in 2020 is projected to reach almost $30 billion by 2030.
Securities is a high-growth sector of $70 trillion, and REITs earnings increased 24.6% this past year.
DSS certainly seems to be following a focused strategy to continue to create shareholder value. The company says it achieves this by focusing on key areas for growth, such as developing solid revenue growth, increasing profitability, and growing assets that drive stock price and market cap.
Buying Assets - Securing businesses and infrastructure to generate revenue.
Business Optimization - Identifying business needs, providing financial resources, and empowering and incentivizing the management teams of the subsidiary businesses to be successful.
Positive EBITDA - Achieving positive earnings before interest, taxes, depreciation, and amortization (EBITDA) by creating economies of scale and revenue generation within those businesses.
Public Offerings - Sharing success with existing and new shareholders through the periodic distribution of stock dividends as subsidiary spinoffs through an Initial Public Offering (IPO).
Monetizing Growth In Key Sectors
DSS is acquiring ownership positions or fully acquiring businesses in high-growth sectors to monetize its holdings.
The company reports that by transitioning its revenue streams into exponential and emerging new business lines, operating the business to create growth opportunities and scalable and recurring revenue, and restructuring and developing assets to position them for growth and potential monetization, DSS will eventually be creating more shareholder value.
With companies like Johnson & Johnson (NYSE: JNJ), General Electric Company (NYSE: GE), and 3M Co. (NYSE: MMM) recently making headlines due to spinoff opportunities for shareholders, one of the most unique aspects of DSS for investors could be its strategy of incubation and subsequent spinoff of companies under its wing, automatically providing investors with pure-play tickers just by owning shares of DSS.
This article was originally published on Benzinga here.
DSS is a multinational company operating businesses within nine divisions: Product Packaging, Biotechnology, Direct Marketing, Commercial Lending, Securities and Investment Management, Alternative Trading, Digital Transformation, Secure Living, and Alternative Energy. DSS strategically acquires and develops assets to enrich the value of its shareholders through calculated IPO spinoffs and a parametric share distribution strategy. Since 2019, under the guidance of new leadership, DSS has built the necessary foundation for achievable growth through the formation of a diversified portfolio of companies positioned to drive profitability in multiple high growth sectors. These companies offer innovative, flexible, and real-world solutions that not only provide mutual benefits for businesses and their customers, but also create sustainable value and opportunity for transformation.
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