An Introduction to Jerash Holdings (Nsdq: JRSH)

Ajouté : 2026-05-23

[00:00:16]I got [music] heat.

[00:00:26]>> [music] >> Welcome to Common Sense Investing. My name is Cameron and today I'm going to continue my little video series here introducing in detail in a longer video could take 30 to 60 minutes. This isn't one of my normal 8 minute type introduction videos. This is kind of more of a deep dive where I take a look at another good company, hopefully a good company, attending Planet Micro Cap in Las Vegas this year, June 16th to June 18th in 2026.

[00:01:03]So far, I think I've introduced what?

[00:01:06]Nwave, Proex, and now I'll be introducing a new one. I think there's one or two others I've talked about. Why am I doing this? Why am I introducing these stocks attending Planet Micro Cap Vegas? Because I have an article, I'll write a new article for this year. Maybe I release it in the next couple days where I talk about how important Planet Micro Cap Vegas is and Toronto to Micro Cap stocks. Last year in 2025, Planet Micro Cap Vegas was in late April and we went on a bull run in micro cap stocks in May, June, and July. Was that coincidence? Maybe. But when you have some of the best micro cap in the investors in the world and I mean in the world because people literally fly in from like Europe and other parts of the world, Asia to come to this conference.

[00:01:55]You have a lot of the best micro cap investors in the world hoarding cash because they expect to find some companies they like during this presentation. And so you good investors, lots of cash. All you have to do is really find the best companies that will attract the best investors and their cash. And that's really what we're looking for is to try to find that company that really gets the attention at Planet Microap Vegas to go on a bull run. Now, the long and the short of what we're generally looking for never really changes, right? You want a company that's got good sales growth or will show good sales growth in the future is at some form of inflection point. you know me is that I typically like profitable or again hitting that inflection point to profitability. So you get you know revenue growth, you get some profit margin growth and then you get some multiple expansion which does mean you know you're kind of looking for those little undiscovered companies.

[00:02:53]You're not necessarily it's a lot different if you're looking for a trade, right? If you're looking for a trade, you're looking for a stock that's potentially already up and you just want to, you know, get in there and try to continue that momentum upwards. That's definitely what you're kind of looking for. But also what we're looking for is that stock that's kind of just been trading sideways and is now a good time to be a buy and hold for a longer term type of investor. That is the question.

[00:03:16]But those are kind of the two things that I am typically looking for.

[00:03:21]Probably more important than ever this year in my opinion. There's a lot of good companies out there. Very low valuations. The micro cap markets are absolutely beat up. It reminds me of 2022, right, where we had a bare market for around what, 12 to 18 months from late 2021 all the way to 2023.

[00:03:39]People, we're not there yet. We're in about a six-month bare market according to my calculations. But you see people upset, people losing money, you know, rightfully upset for losing money. You see people leaving the micro cap space, giving up, too much volatility, down 50%. I can't handle that. I totally get it, right? the micro cap space is definitely not for everyone. However, when you do look back at like previous bare markets like 2022, if you're patient, if you're lucky enough and you're hardworking enough to kind of find those best companies that are going to improve, going to in the future, you know, once we hit another bull run, gather some attention from some of the best micro cap investors and improve as a company, then really you that's where you make your gains. So unfortunately unfortunately as much as it sucks to like lose money in micro cap bare markets, it's really your decisions today that are potentially going to make you money in the future. What I'm looking for is just these companies to kind of give me a reason, right? I'm not rolling the dice here. I want to find the best companies that really aren't discovered that have sales growth, margin expansion, and can get multiple expansion in the future. So with the company today and all future videos, I am going to focus more on this summarizing this because I feel like especially for new investors, this has been skipped over. Like I I put out a Twitter post today talking about how, you [snorts] know, this is the most important and possibly least discussed thing in micro cap investing is that everybody talks about knowing why you're buying, building a thesis, building an investing strategy. But what the hell does that mean, right? So, I'm going [snorts] to, you know, tweak this along as I go over the years. What what is a micro cap stock investing thesis? What are we looking for? But very simply here, what am I buying? Why am I buying it? Why now? What do I expect? What needs to happen? What could prove me wrong? So, I am going to talk about that today in another stock that is attending Planet Micro Cap Vegas. And as always, keep in mind, not financial advice, not a solicitation to buy, sell, or hold this stock. the the actual company I'm presenting today, I'm not a shareholder in, so I'm unbiased, but I don't want you watching this video and just buying the stock or selling the stock based on my opinion. These are just my opinions.

[00:05:57]This is just my initial research on this company to hopefully get the, you know, brain juices flowing and thinking about what to do with Gash Holdings. So, this is the stock I will be talking about today is Gash Holdings.

[00:06:13]Okay, what have we got here? Why am I talking about this? Well, this is not typically a company that I picked. This is a a pick from my AI. So, I'm definitely more looking at the numbers, you know, more than the the qualitative, it's not a qualitative pick. It's very much like a quantitative pick from artificial intelligence. And if you look at their recent earnings, which were just reported in Q3, basically my AI didn't just give them a B- rating grading. It gave they gave Dash Holdings a B+ rating. It's one of the top 10 ranked stocks attending Planet Micro Cap Vegas according to my artificial intelligence. So, it's worth my time to take a look at Gash. I've never researched this company before about 3 weeks ago. So, this is all new research.

[00:07:04]in the past year. It's only up about 15%. However, you could see the volatility. It's only up 15% because it's also trading at its recent highs.

[00:07:14]And you could see it goes to these recent highs. It goes to like $3.50 and then down and then up and then down and then up. Recently, it was down. It was down all the way here, you know, in late 2025 to what is that? $2.65, something like that. Pretty low, right?

[00:07:32]This is pretty low. $2.82 with a high of $360.

[00:07:37]Spikes up quickly, spikes down quickly, and now it's up quickly again. So, this is definitely something to consider when we're looking at the stock. Massive amounts of volatility. It's just kind of sitting right here at probably, you know, average price of about $3, $310.

[00:07:54]If you just bought this entire year, you probably have a DCA sitting around, you know, $3, $310. But right now it's spiking up again. Looking at their five-year chart down. Um, so this is another company co hype, CO excitement, crashes during 2022. Remember how I keep bringing up 2022, right? Does does this feel like 2025, late 2025, early 2026 to you?

[00:08:22]Seems like every stock is just crashing down, down, down, down, down. It hit a floor here towards the end of 2023. And since then it has done very little except for the occasional time where people have gotten excited about this stock again. So be careful, right? When you see this, you know, you like to get hopeful and you think, well, is this is this the change the inflection point that's going to drive share price back up to $7.50 potentially. We're going to talk about that today. But you also see previous times where people also got excited like in late 2024 when share price went up similar to what it's doing right now.

[00:09:00]People got excited and then it nothing happened except it crashed back down again. So keep that in mind for the longer term thesis on this company.

[00:09:10]Looking at just the valuation though and interesting for me [snorts] the market cap is pretty steady. You know, the the share price looks volatile, but overall 38 to $42 million market cap. Okay, that that's a little bit less lumpy in my mind. You could see it's just starting to become profitable. So, this was a company previously, no PTE numbers here on the valuation. Of course, it just becomes profitable. And these PTE numbers are very high. Those are starting to come down. Right now, it says the trailing PTE is 21 times. Same with the EVA. So their EBDA obviously maybe a little bit more positive just starting to get some EDA here back here in 2024. However, over time as the company has been becoming more profitable and producing more EV to EBA or more EVA EV to EVA is now down to about four.

[00:10:03]So fairly you never want to say cheap but you know it's interesting you you see you know we'll go look at the numbers. Is it growing? Is it profitable? It seems like it's becoming more profitable. that's growing EV to EBIDA. You don't want to say that's cheap, but you know, I keep saying that seems like this year in 2026, there are a lot of pretty good companies out there that are at trading at singledigit E, you know, EV to EVA numbers. This is another one. If you're sitting at 4x, 5x EDA, right? Is Gash Holdings a good company? We will take a look at that a little bit more. You [snorts] zoom out a little bit, right? $42 million market cap company, 152 million of revenue. So significant revenue quarterly revenue growth 18% EBIDA 7.41 million so making revenue growing and profitable at least on an EBIDA standpoint you know 11.45 $45 million cash, $9.7 million total debt. This this changes now. This is a big question mark of what this looks like. They did just buy a new manufacturing facility. So, this will change. But you look at these numbers pretty good. You know, small float 12.7 million 12.7 million shares out there and 50% of those are held by insiders and 8% held by institutions.

[00:11:18]Um, the worst thing I could see here is for all that success and all those good things and all those green arrows not producing cash flow. So, you could see, you know, $42 million market cap on $152 million revenue and immediately you wonder what the hell's going on. Well, they're not producing cash. So, arguably, you know, low quality revenue is kind of what I'm looking for. Is the quality of their revenue improving? Can they become cash flow positive? Are these numbers wrong? We will have to go take a look, right? Yahoo Finance where these numbers are taken from are not always the most accurate. That's why we do more to research. But I mean this this does look impressive and it's I just made my 2025 endofear 2025 live stream. You have to be very careful, right? I point to a lot of companies in 2025 who had like good insider ownership and insider buying. And if you just use those metrics alone, like, oh my gosh, insiders really have, you know, have their money in the game here, right?

[00:12:21]They've actually invested in their own company. They believe in their own company. It must be a good company.

[00:12:26]There are a number of companies in 2025 that absolutely cratered despite having really good insider ownership and insider buying. However, in general, what I'm saying is this is just a good factor. It's just not the one and only factor, but I mean it's a good start, right? Low shares, insider ownership.

[00:12:47]Um, also on the NASDAQ, so you have to keep that in mind for valuation eyeballs and potential future of this company.

[00:12:54]This is not like a Canadian securities exchange company that's, you know, on some shitty little exchange that has limited upside potential. This is a NASDAQ listed company.

[00:13:06]Here's what they do. Now, here's one of the problems right off the bat.

[00:13:10]Unfortunately, you'll be like, "What the hell, Cameron?" Because custom branded apparel for global brands, this is a clothing manufacturer company. We have approximately 6,000 skilled employees in six production facilities and four fulfillment warehouses in Aman, Jordan, and Hong Kong.

[00:13:32]So, that's risk right there. I believe I'd have to double check. I do actually believe it's headquartered in Jordan.

[00:13:38]So, this is a Middle Eastern clothing company. And right off the bat, this was one of those stocks that I think if my AI had not flagged this, I would probably just throw it in the garbage and just be like, I have no interest in like a Jordan headquartered, you know, clothing company. Number one, the geopolitical risk of being in the Middle East. And then number two, it's like, well, Cameron, you just said you have zero interest in a clothing company. and and rightfully so. Right? So, I will not look at this so much as a clothing company. I'll try to focus more on the numbers, but I mean, there's a lot of things already here about Gash Holdings that really don't suit me as an investor. However, again, AI flagged the stock for me. As I did some more additional research, I did find some things that are actually quite interesting. And despite me not being a shareholder right now, I am considering it. And again, you know, I've pointed out I fabric to people. And I said, "Look, despite me not liking I fabric for personal reasons, mostly because I don't like clothing companies. I'm not a clothing guy. I've never deep researched the clothing industry. So, it's tough for me to really evaluate a clothing company when I know nothing about it and I don't really enjoy researching them."

[00:14:57]At the same time, I said, "Please pay attention to I fabric, right? It has been gaining momentum. More and more micro cap investors have been talking about the stock, liking this company.

[00:15:07]They just did an interview on small cap discoveries that'll probably be coming out. People like this company and it is up 300%. So, this is one of those companies that I did personally missed out missed out on. It is a clothing company and I don't mind that I missed out on them because of that, right? But I did tell people go take a look at I fabric. Now it is up significantly and people are still buying some starter positions at this price because they believe in I fabric so much.

[00:15:34]I know Jordan is a long ways away from you know a Toronto Stock Exchange listed company but you know can they do something similar to I fabric as a clothing company? That is the question.

[00:15:47]Um so Custom Sport and Outerwear again their location here Jordan and Hong Kong I've already talked about this. They have some pretty big products, right?

[00:15:55]Northface, Timberland, New Balance, American Eagle, Calvin Klein, Adidas.

[00:16:00]Six factories, four warehouses, 6,000 people. Annual capacity is more than 20,000 people. 20,000 pieces for Dash Holdings.

[00:16:10]Why am I interested? So, one of the reasons that I find kind of compelling here is that due to the location of Jordan, we'll talk about this more, is that with the global supply chain shifts, Jordan has actually been derisked a little bit. And now, of course, there's increased risks with the Iran war, and we'll talk about that. But you remember all the Trump tariffs mostly focused on Asia, Asia, Asia, Asia, trade with China. China shifted a lot of trade and manufacturing out of China into other Asian countries and the purposes was to evade tariffs and Trump has gone, "No, we know what you're doing and now we're just going to tariff all of the companies that China switches manufacturing to." So, I do feel like Asia is pretty risky right now on a tariff situation that has not been resolved. I think Trump is going to China in the next month or two, right?

[00:17:07]trade and the trade war with China has not been resolved and that creates like geopolitical risk especially with manufacturing companies in Asia in my opinion that is the bullc case for dash holdings they're in Jordan completely ignored kind of by the Trump administration so we'll we'll get into that in a little bit but consistent expansion company every couple years has done something it's been around for a long time so again you talk about risk Right. It it's not a new company. It's not, you know, super new to the market. It's not they've got large clothing brands. Every few years, they kind of make a decision that seems to have worked out pretty well from them. So, if you go look at like an history of execution, you know, they haven't gone bankrupt in 26 years.

[00:17:55]So, that's a good sign, right? Strategic global manufacturer. And this is again coming back to the the more important point for me where I kind of went I don't know if I have any interest in gash holdings to like okay I should probably take a deeper look.

[00:18:09]Manufacturing in Jordan mitigates tariff concerns labor costs and trade tensions.

[00:18:15]20 million pieces annual capacities as of June 30th 2025 and growing. That is up significantly now. Expanding customer base beyond the USA with increasing presence in Europe. So again for tariffs and trade that's a good thing. Recently added first strategic partnership enhance textile leading South Koreabased global apparel group. So again for trade diversity and risk reduction that's another good decision to produce the major initial order for one of the largest US-based multinational and omni channel retailers. And again, this is like US companies and European companies diversifying away from Asia and the risk of tariffs and trade implications. Added the MINA region, you know, Middle East region sourcing team to reduce dependency in Asia for raw materials and shorten lead time. So, they're literally listing out two of their risks that they've identified as risks and ways in which they're trying to mitigate those risks. So, that sounds pretty good to me. But then again, attractive partner to other manufacturers whose customers are interested in shifting production to Jordan and not necessarily again shifting production to to Jordan, right?

[00:19:24]Shifting production away from Asia and diversifying. How many companies in 2025 when we had the global trade war there, you know, March, April, you know, February, March, April, May were talking about, hey, we need to diversify our manufacturing because there's too much risk having 80% of our manufacturing in like a single Asian country. Well, this is such a huge kind of bullish tailwind for Gash. Longstanding duty-free agreements with the EU, UK, and others.

[00:19:57]low reciprocal tariffs from the USA. So if you actually look at it right now, tariffs from Jordan, as far as I could find, and please go doublech checkck this information. Again, I am no geopolitical expert, but what I could find is that there are 0% you know tariffs with the USA. The caveat is they need to comply with the rules of origin direct shipment requirements. If a product does not qualify, then normal apparel tariff appear apparel normal apparel tariffs could apply. But if they do get that exemption, it's 0% tariffs for Gash Holdings and everything they produce. Right. So, US imports duty-free if they meet US Jordan FTA rules of of origin. Um, international trade says textile apparel, footwear and travel goods traded between US and Jordan are duty-free if they qualify under the agreement. This gives them a tariff advantage versus many Asian apparel manufacturers.

[00:20:56]Nor normal apparel duties can be meaningful but qualifying qualifying and that's the big caveat. Jordanian apparel can enter the US at 0% duty. So that is why a lot of these companies are moving to Dash and that is one of their biggest tailwinds right now. So again, if we if we start if we just start with like okay, we're forming a thesis and this is the bullish part of the thesis right now. I really haven't discussed many of the risks except for the two risks that the company itself has pointed out, right? But if we're starting to form the more more bullish thesis, you could see why AI not only kind of flagged this company as interesting. But as I do more human research, I'm like, okay, I I could see why. I could see why I got a B+ grade, you know, strategic transformation, strategically diversifying its customer base. It's expanding manufacturing capacity. It's vertically integrating through pioneering sustainables textile joint venture. I don't really care.

[00:21:56]Positioning itself for long-term growth and improved margins. Saying the right things, right? Technological moat. The Dash new tech joint venture introduces a proprietary dying process that significantly reduces water usage by 90% and energy consumption by 60%. That's part of those improved margins. Carbon footprint is lower, stronger ESG aligned, blah blah blah. competitive advantage, right? Geographic advantage.

[00:22:24]Um, leveraging Jordan's tariff-free trade agreement agreement with the US and the EU coupled with competitive labor costs, Dash attracts global brands seeking supply chain diversification away from traditional Asian hubs.

[00:22:38]All right. Right. That, you know, for all the companies in 2025 and early 2026 that have seen the narrative turn on them quickly, right? good company in 2024, invested for growth, took on too much risk. Now in late 2025, 2026, the narrative is terrible. NTG, Zoomed, all these other companies where it, you know, they gone from like finit favorites to just completely hated companies because the narrative has changed. This is a pretty good narrative, right? These are some pretty good ta tailwinds, right? Um, get away from the trade uncertainty in Asia. Come manufacture with us in Jordan. We've got all these new facilities. We've got a stable workforce.

[00:23:20]Um, you can mostly get away from, you know, trade and trade concerns and even all the way down to potentially 0% tariffs. And our facilities are, you know, reducing water usage, so we're we're sustainable and we're reducing our energy usage, so we're also improving our margins and and producing more quantity, good quality stuff with less energy. So this is it's a good little start of a bullish thesis. If we start looking at the numbers though, right?

[00:23:51]Even though that is a thesis, you start getting into more of the risks. So if we go back here, you know, I just want to talk about a couple of the risks. I don't want to skip over the risks. A dependency right now in Asia for raw materials. So even though you're diversifying away from Asia manufacturing, a lot of the raw materials is still coming from Asia.

[00:24:12]Will that meet the criteria for 0% tariffs? They're trying to source away from Asia, but it's still coming from Asia and then shorten the lead time. So long lead time of raw materials coming from Asia may still be exposed to tariff. That is a risk. The other risk lumpy, right? Uh this is quarter quarter. This is not trailing 12 months.

[00:24:35]You know the green here is the cash production from operating activities.

[00:24:39]some quarter that is significance and some quarter that is down significantly.

[00:24:45]Other quarters are kind of just right in the middle and it's been that way for a while. So, it's tough to always expect something different or expect something new. Like I'm not going to sit here and say like, oh, the next six quarters the cash from operations is just going to like be steadily consistently higher and higher and higher. It doesn't look like that based on history. This company has been around for a long time and their quarter quarter earnings have consistently been lumpy. That's what we can say moving forward. [sighs] You smooth that out a little bit more on the trailing 12-mon numbers. It's like, okay, um this makes a little bit more sense. You see here, this is another company that, you know, COVID time because they were in Jordan because the it was harder to move stuff out of Asia.

[00:25:32]It seems like their operations in Jordan got a boost during CO, right? And company was improving significantly even on the bottom line. And then it seemed like this is another company that after COVID suffered and we've seen a lot of those companies as well. Now while a software company postcoid can typically adjust pretty quickly they make a few changes it's pretty capex light and you can recover quickly the problems with a larger capex company that needs more investment to make changes when they suffer after co it takes more time so the question is now you know it does look like they made a lot of those changes it does look like they've made some good decisions if I'm ranking them financially like on execution as a management team. It does look at least recently you could see again why my AI is interested in them because since about 2023 they have been improving not quickly. Um but you see here revenue has been going up their their gross profit has been going up a little bit gone from pretty fairly negative numbers to some some quarters and are better than other others. Some trailing 12-month years are better than others but overall there's been improvement. So, slightly trending improvement on the trailing 12-month numbers and a little bit less lumpy. If we get into those, and this is the interesting part for me on share price.

[00:27:00]We'll look at share price here in a minute. Q3, they just reported Q3 and that was February 9th, 2026. So, this is a weird reporter. Like, just about everybody right now has been reporting full year and Q4 earnings. Some companies are already reporting Q1 earnings. Every company going into Planet Micro Cap Vegas 2026 will have reported Q1 earnings or most of them anyway, right? May already be working on Q2. So, they could go into Vegas and say, "Hey, you know, we can't tell you what the Q2 numbers are, but we've got a pretty good outlook for 2026 right now."

[00:27:36]This company is different in that they will not report Q2 and Q4 and fullear earnings until when? July. go check that early August, something like that. So, Vegas is late June, like June 16th. And this company will not have even reported their Q4 and fullear numbers at this point. At this point, going into Vegas, the only hard numbers that investors will have to work with are the numbers that I have as I'm recording this video today. Now, the company might be able to talk to investors personally one-on-one, talk about outlook, you know, go in either negative tone or go in with a huge smile on their face and say that, you know, fiscal 2027 is looking good and I can't wait until you see your outlook, right? Depending on that positivity, they will have that information internally, but it will not be posted publicly. Right now, this is all we have to go on. So this is interesting to compared to a lot of other companies, right? Is that um we won't have that information. This could be a boost like if Planet Micro Cap is in late June and then they do report very good earnings in July that that's not a terrible thing, right? But as far as their third quarter earnings, you know, revenue up 18%.

[00:28:56]Pretty good. Gross margin improved 170 basis points. So, you know, again, I showed you that slide. Sales growth, margin improvement, operating income nearly tripled to 1.9 million, right?

[00:29:09]Net income improved to 1.2 million from 6,000. Again, I showed you though, don't be super fooled because their their their earnings are like this, like volatile and lumpy. But if you're looking at it, this looks like a pretty lumpy up quarter. This is not a bad quarter in Q3 that they are taking into Planet Micro Cap Vegas revenue growth and margin growth. Here is their outlook. Revenue for the fiscal fourth quarter is expected to increase by 23 to 26%. They just had 18% in Q3. They are guiding for 23 to 26% in Q4. Gross margin for the fourth quarter is anticipated to be 14 to 16%.

[00:29:52]Right? So this is maybe not margin growth, probably not, but it's still kind of margins in line with what Q3 had and significant revenue growth still. So this reflects increasing demand from our long-standing core global brand customers complemented by the initial contributions initial contributions from her new strategic partner in K in Korea, which together drove meaningful improvements across both the top and bottom lines. They're saying the right things, right? With our new customers, we expect strong revenue growth that exceeds our current manufacturing capacity, which reinforces our decision to expand operations to meet demand. You can't get tone from text. You can't see the smile on their face, but they are saying the right things. This sounds good. This is this is a company that seems to be growing and hitting some inflection to profitability. And you know what happens in the future. Their outlook is at least sounding good. Now of course that is now I think you understand why share price has spiked recently. The question for me is can it hold that? We have a ways we have 6 weeks 5 weeks 6 weeks until planet micro cap Vegas in 2026. Does it hold $342 for the next six weeks? especially given how challenging the macroeconomic conditions are and especially given that this company is in Jordan when the Iran war is still going on, right? Do we see another price bump down? Now, maybe that doesn't happen. You know, there was a time when this company did hold this price for a significant amount of time, you know, all the way back in basically May of 2025 all the way to, you know, what when did I say the bare market started in micro cap stocks? basically November 1st. This looks like another one of those companies that got hit by the general market conditions heading down because this company was holding about $342 right up until Halloween. And then since then, just like so many other companies, has just been kicked in the nuts until recently, they report a Q3 that was very, very, very, very good. Right? So that's kind of what's going on here and what's going on with their share price.

[00:32:11]Okay, so this part I just got to read.

[00:32:14]We are thrilled with a recently announced acquisition of a bank-owned manufacturing building and associated land which represents a significant milestone in advancing our core business growth strategy for the next 5 years.

[00:32:26]Upon completion of renovations by the end of this calendar year, so not right away, but it's going to be the end of 2026, the new manufacturing building is expected to increase production capacity by at least 40%. So they already mentioned that their current growth, their current demand exceeds their current manufacturing capacity. So by the end of 2026, they bought this facility. By the end of 2026, it should be in production. And then by fiscal 2027, that should increase their production to meet their growing demand.

[00:33:01]That's what they're doing here, right?

[00:33:03]Substantially enhancing our ability to support increasing demand as we continue to expand and diversify customer base and product mix. This expansion improves our operational flexibility and supports efficient scaling while maintaining the quality and cost discipline our customers expect. As order volumes continue to grow for new and expanded product offerings, we remain focused on driving further gross margin improvement. So again, they're getting all this demand as people diversify away from Asia that their current capacity could not keep up. So they acquired another manufacturing facility in Jordan. When you look at their 9month, it wasn't just a a good Q3. Well, it was a pretty good Q3. We'll we'll look at what's going on here. revenue in the first nine months is only up 5.8%. I just showed you that Q3 was just 18% and they're expecting around 23% in Q4. So far, even with this good Q3 into the earnings, they only have 5.8% revenue growth in 9 months. However, their gross profit increased 13.7%.

[00:34:06]So, they're doing the right things here, right? Operating expenses for the first nine months were 15.4 million compared to 16.1 million. So revenue growth in nine months not much 5.8% but that is increasing over the next well this quarter next quarter at least.

[00:34:26]But they also managed to keep their operating expenses in check and even reduced which resulted in improving gross profit. That's exactly what you want to see, right? That's exactly what you want to see. And you wonder, you know, the the new manufacturing coming in place in fiscal 2026 or sorry, calendar year 2026, can they kind of sustain this this type of growth?

[00:34:50]Definitely not like 18%, but you wonder if they can sustain a little bit higher than 5%. That is the question, right?

[00:34:58]When you look at what they have now, and I'll have to adjust this due to the manufacturing facility they acquired, but cash and restricted cash, they had 13.2 2 million networking capital $36.4 million. And on February 3rd, they introduced their first quarterly dividend of 5 cents per share on common stock. That is roughly a 6% dividend annually at a share price of $3.35.

[00:35:25]So another little dividend payer, 6%.

[00:35:28]That's not bad. assuming they can hold that dividend. 6% at roughly $3.35 for giraffe.

[00:35:37]Positive points here. Just hammering home these financials so you understand what you're buying, right? This is from Guru Focus. 18% increase in revenue.

[00:35:47]Gross profit increase 31%. The company announced the acquisition of this 184,000qt manufacturing building in Jordan, which is expected to increase manufacturing capacity by 40%.

[00:35:59]Diversifying customer base and product mix, which supports more stable year- round production, hopefully less lumpiness, and reduces seasonality impacts, hopefully less lumpiness.

[00:36:10]Right. The company is collaborating with the Jordan Ministry of Labor to develop additional facilities in rural towns expecting to add 5 to 10% total production capacity. That is on top of this facility. Right? So that basically the government of Jordan is going to help them financially to grow. That's a good thing as well, right? So again, tailwinds understanding what's going on here. Now it's not always sunshine and rainbows. What are the negative points?

[00:36:38]We get into the manufacturing of the building a little bit, right? They're taking on more debt. Operating expenses increased to 5.1 million primarily due to higher sales volumes and increased recruitment costs and growth. Investing for growth does contain risk. Net cash use and operating activities was approximately 3.5 million for the 9 months compared to $581,000 in the same period last year. The company is taking on long-term debt to finance the $5 million of renovations and equipment costs for the new facility with an 8% interest rate. So, they are paying a new dividend and they are investing a bunch of money on growth and on renovations and on new equipment and all of that comes with risk, right?

[00:37:29]And this is cash used in operating activities. So they're negative. That is the biggest risk for me right now. And I'll talk about this at the conclusion, but forget the geopolitical risk. And we're going to talk about that in a minute. Yeah, they're in Jordan, the Middle East, and all this other stuff.

[00:37:45]The biggest risks for me is this is a company that right now is burning cash, has for some reason decided to pay a 6% dividend, and is taking on debt to basically fund this growth. So very very interesting in what they're doing here.

[00:38:03]Now, you could sit here and say that the the dividend seems to show really good confidence from management that all of this is sustainable. The growth is going to occur. They're going to be, you know, switch from a cash used operation in 2026 to a cash producing operation in 2027. That is what they're trying to tell the market with this dividend. This is what they're going to tell investors at Planet Micro Cap in Vegas of 2026.

[00:38:32]However, there's risk in all of this, right? You you're running cash out the door for a dividend. you're taking on all this debt instead of using that cash for, you know, investing for growth. And this is a bit of a problem for me.

[00:38:47]There's ongoing pricing pressure from major customers due to global tariff situation affecting profit margins.

[00:38:53]That's another problem. And the company faces significant potential geopolitical risks in the region which could impact operations and logistics. So yeah, [sighs] let's look at that risk.

[00:39:06]Called the Iran war could hurt Gash holdings. Higher freight and logistics cost if the Red Sea Kuaz Suez cals remain disrupted. Raw material delays especially if inputs come from Asia and routes are and routes are rerouted.

[00:39:20]Insurance freight sir charges across Middle Eastern shipping. That's probably for me maybe the most realistic like yes this is happening right now kind of thing. And then customer caution because their factories are in Jordan near a tense region. Literally, there's probably something flying overhead of their facilities as I record this video.

[00:39:41]Right? So, already disclosed there's Middle Eastern instability. Again, remember, you look at a company 4x EV to ABA. Why is it so low? This is a big reason why, right? And with this growth, they could literally be two to 3x EV to Eva right now or pretty soon after their Q4 earnings. And if share price drops a little bit, they're probably two to three times EV to Eva. But there's a significant reason for that, right? As well as Houthy attacks in the Red Sea could disrupt supply chains and raise costs. The recent Q1 improvement was partly due to reduced import logistics costs. So renewed disruption would be a real headwind and I do feel like they are probably getting that headwind right now.

[00:40:24]Now what has been pointed out is that uh where is it here? While logistics risks in the Middle East persist, the shift to the Aquaba port and a new capacity expansion plan signals management confidence in sustained demand. So what does that mean? What has happened to reduce risk? They have shift ports, right? So what are we talking about?

[00:40:47]This is not um Hormuz, right? This is hormuz right here, which is where all the news is right now. This is uh oil, right? Oil is stuck. Oil energy prices are going up. barrel oil is going through the roof sitting at right now probably $100. Everybody's talking about Hormuse. Less dis discussed but still discussed is the Red Sea. This is the port for Dash. So if this somehow gets disrupted andor shut down, then their raw materials get stuck. Um their material outputs get stuck and this company will absolutely crash, right?

[00:41:23]they will have be shut down essentially and because of this threat they're probably paying higher shipping costs and higher insurance costs right now. So yes, I mean EV daba four or under four, but you are right now taking on this significant geopolitical risk. Can that get resolved before Planet Microap Vegas in 2026 in June? Maybe, maybe not. But it's definitely something for you to look at and consider, right?

[00:41:53]The other thing is, I've talked about this. I showed you the cash and everything else. That was before they acquired this new building. So, these numbers are expected, my best guess, but we don't have the official numbers. But this is including the new the new building that they just bought. So, if we look at if we incorporate what they had for cash and debt, and we incorporate this new building acquisition, $1.5 million of cash, you know, total cash, $13.2 2 million is what they what they said. Their net cash before the the building loan and before acquiring this new building was $3.8 million. However, once you factor in that new building and the new mortgage and loan they took on right now, they have probably $12.1 million of debt and net cash has dropped from $3.8 million to about $1.1 million. Again, $1.1 million net cash and they have decided to pay a 6% dividend. So, curious decision. Curious decision. And still not bad. It's not bad. It's, you know, they're doing what they needed to do.

[00:43:00]They had enough cash to grow. Very smart decision. Probably buying that new facility and putting that dividend in place does show confidence in the future. But you have to look at it as like, okay, these are good things with some risk. At least that's the way I'm interpreting right now. The acquisition does not look balance sheet breaking, but it does reduce flexibility, right?

[00:43:23]They have decent working capital, but cash flow is weak. They use $3.5 million in operating cash in the first nine months of 2026 while also paying dividends. They also plan about $5 million of renovations and new equipment. So the real cash burden is closer to $8 million total project cost once you include acquiring the building but then renovating the building not just the building price. So still financially okay but the deal makes them more dependent on growth actually showing up if the new capacity ramps well it's positive if orders slow or margins weaken leverage and cash pressure rise. I am wondering and just speculating if they are not I know they just took on debt. So maybe this doesn't make sense. Maybe I'm just conspiracy theorist here, but I do wonder if they're not attending Planet Micro Cap Vegas to see if there's somebody who would be willing to finance them. Right?

[00:44:17]If they could run a financing uh just for $5 million more, would they be able to raise more? Right? It it would significantly reduce their balance sheet risk. You know, ownership already owns insiders own 50%. I mean, would it be the worst thing in the world for them to reduce their ownership from, you know, 40 to 45% but let some really good Planet Micro Cap investors um get an opening position with a financing?

[00:44:47]I don't know. I have no idea if that's their intention, but I mean, and especially it's hard to say that's their intention with their share price kind of volatile, but I do wonder now that share price is up again, right? Would they wonder would they look at this and say, "Hey, would would any of you Planet Micro Cap investors be willing to finance us at let's say, you know, the $3.35, which is pretty much right where the share price is right now after hours had dropped a little bit." Um, I think some people would consider that. Some people might consider that, right? So, when you look at the change, it's kind of real. I mean, this is a bit of a summary of what I've already showed you, but in their their Q1, they actually saw a 3.2% revenue decline. Seasonal. Remember how I said it's seasonal. In Q2, 4.3% revenue increase for Q2. Q3, 18% growth.

[00:45:43]Q4 guidance. This is not reported yet.

[00:45:45]This is just their outlook 23 to 26%.

[00:45:48]Right? Margins of 14 to 16%. So improvements seasonal it will drop again probably in Q1 and Q2 of next fiscal year. Keep that in mind. This will not go away where they'll struggle in in certain quarters. But I mean at the end of the day pretty significant improvement, right? So it it's going from, you know, a company that potentially was only growing like 5%. To like we're getting some numbers here when you average this out, it's probably closer to 15%. Right? Can they continue that in the future? That is kind of the question. Hopefully they can with this new manufacturing facility. [snorts] If you look at beyond this year, new capacity supports continued growth. They already completed 15% production capacity in June 2025. That's why they're getting this 18 to 23% growth right now. Another project was expected to add 5 to 10% total capacity in early 2026. This is right now. So that's those rural uh Jordanian villages that the government is going to help them build some small manufacturing facilities in.

[00:46:53]You know, another 5 to 10% capacity.

[00:46:56]Not explosive growth. This is never going to be one of those companies that's just going to like double revenue in a year, right? They're never they're never going to be that SAS stock that just shoots to the moon, right? You're this is not explosive growth. You know, if if it's more like mid to high teens, that would be significant. If we're talking like, you know, 14 to 19% growth for the next couple years for Groj, I I don't know if I'm pronouncing it right.

[00:47:22]Should check that. But if they're getting that, then that that's a pretty good stock, right? If it goes back to like that 5 to 10%, probably not interested. And the reason is they need growth. They need the growth to support the debt they just took on. So they kind of need this 14 to 19% growth. Um that is part of the risk is you're kind of hoping for that. If they get this, it's it's probably not something I'm interested in. But right now it's looking good. It makes sense. The debt makes sense. I just said this only if revenue stays up and margins hold around the mid- teens. If growth drops back to single low digits, the debt renovation spending starts to look much less attractive. So, you know, we get excited about the potential rewards in a stock like this. However, you have to keep in mind uh stop-loss, you know, looking at the investing thesis. What would what would make my thesis wrong? It would be this drop. If they're not getting that kind of 14 to 19% growth, if they're not getting the the 14, 15, 16% margins, then all of a sudden that's kind of a thesis breaker here. What did analysts say? There's not many. Um I think there's only two analysts. Yeah, two analysts covering this stock. Revenue estimate for full year 2027. And keep in mind, right now they're on Q3 2026. They will be reporting Q4 2026 in July. So they are right now not entering 2026.

[00:48:50]They are entering their fiscal 2027.

[00:48:52]Analysts are projecting $175.7 million revenue. That is 10 to 15% growth is what the analysts are projecting. And they're predicting an EPS of 31 sitting at $3.35 share price today.

[00:49:07]That's just a little bit over 10x, right? 11x somewhere in there. Um 2027 earnings per share. However, to get that earnings per share this year, you know, you need that 10 to 15% growth and you need that, you know, margin improvement.

[00:49:23]You need that 16% gross margins. So, you need that 15% growth. You need those 16% margins to hold. Otherwise, the thesis for this 31 cents per share EPS kind of falls apart. But that's what the analysts are guiding for the the two analysts that are there. What catalysts are coming up here? Especially for Planet Micro Cap Vegas, right? May, June. This is probably not right. I kind of have it as July, but I could be wrong, right? They need to confirm the Q4 guide. They need to report their actual financials. August of 2027, we need just we're just playing the wait game. Does growth continue? Right.

[00:50:03]August, November of 2026, new customer order momentum. calendar 2026 is when the renovations and equipment once this building is complete that will be the huge catalyst for this company and the cash flow risk as well to see if everything stays on budget. So the next few months is spending for growth.

[00:50:22]Whether you love that or hate that, it's probably going to be spending for growth for Dash as they spend money on this new manufacturing facility. Late 2026 renovations targeted for completion.

[00:50:35]late 2027 2028 new facility ramps production that's when we should really see growth. So again whether you're interested in this one today whether you want to wait and see if share price continues to go down those are kind of some of the catalysts for me. For me a big question is you know what's going on with the dividend. That that is [snorts] a weird one to me. Um it does seem like management is making a lot of good decisions in my opinion until they hit that dividend. That's a little bit weird. That does make me question things a little bit. They don't have the cash for it in my opinion. Um, dividends being funded by debt. Um, very strange.

[00:51:12]Very strange. So, I mean, this is what we're looking at here. You know, kind of a summary. Growth improving but still needs proof. Do they get 10 5% 10% 15% 20% growth next year is the question, right? Balance sheet. Balance sheet is okay, but getting tighter with the debt and capex plus the dividend is a real question mark. EPS upside is possible, but it's not really a conservative number. The 31 cent EPS is basically if everything goes well, but I mean this is a company, real revenue, real customers, a dividend capacity expansion could drive growth, right? If if this all happens, then it's probably worth more than the $3.35 they're at today. Now, the problem is they're taking on debt. They're funding renovations. Cash flow has been weak.

[00:51:59]EPS estimates might be too optimistic and there's a lot of execution that needs to occur here. This is not a gimme. Um but you do have to question it. Is this company it's you know the risk is always like oh we're spending money we're investing for growth. There is risk here. But does that risk create an inflection point where in 12 months from now the company is growing 20% with 16% gross margins and a 31 cent EPS and growing from there with a 6% dividend.

[00:52:30]That that is very interesting. So if I go through the thesis, I hope I explained all this, right? What am I buying? you're buying a clothing manufacturer in the Middle East in Jordan that's been around for a while and is growing significantly right now because uh companies are trying to diversify away from Trump's tariffs and away from Asia and Trump's tariffs, right? So, the Jordan area has low tariffs to zero tariffs for most countries. You know, why are you buying it? Well, it seems to be at an inflection point right now, right?

[00:53:02]They're investing for growth. They have another manufacturing facility. All the narrative is that demand is exceeding their current capacity. That that's exactly what you want to hear. So many stocks, so many companies in 2025 have been listening to earnings calls and they're just depressing and ugly and doom and gloom. I mean, to to listen to a company like Dash saying like, you know, demand is outstripping our capacity. We have to grow to meet demand. That's what you want to hear.

[00:53:29]Why now? Um, mostly for me it's undiscovered a little bit and it's going into Planet Micro Cap. So, you know, this is not a company I've ever heard of before. It's probably because it's a in Jordan Middle East company. They I don't think they've ever attended um Planet Micro Cap before, though I could be wrong. But, I mean, this is not like a finit favorite. This is a a tiny little boring manufacturing company that's not even profitable yet. But because of that, it's very undiscovered. And if they can execute and they can get some attention and they can get some larger investors interested in them, now might be a good time. What do I expect is I don't know. Like I said, I I just started my research about three weeks ago, four weeks ago. It's tough to build like a what I expect, but I did talk about like the thesis breakers here. You want to see continued growth. You want to see continued margin expansion. I think right now because I'm so new to the company, I want them to continue to say and do the right things, right? I don't want this new facility to go over budget. I don't want to hear about delays in this new facility. I want to see continued ex execution. That's kind of what I expect because I'm so new to the company. I don't have a lot like my stop loss is like kind of really tight to expectations, you know what I mean?

[00:54:48]Um, so that's what I expect. What needs to happen for me? Um, stupid as it sounds, probably share price to drop a little bit would interest me a little bit more. It's a very volatile share price, I'm not [snorts] super keen on on paying like a 52- week high for this for this company when, you know, um, there's still a pile of risk. I mean, they could have a freaking, you know, F-22 fall out of the sky and hit one of their manufacturing buildings right now because of the war in Iran. um the the Red Sea could just get closed and the company crashes to nothing. Just gets completely shut down, right? So, I mean I to take on that risk, you would you would really need to give me a reason to take on that risk. So, right now, at least in the short term because earnings are so far away still, you know, it's it's May and earnings aren't getting reported till maybe July. Um, right now I want to see the Iran war situation get resolved and I want to see probably share price come down a little bit.

[00:55:48][snorts] What could prove me wrong? I think I listed out all those things, right? I think it's not so much about what can prove me wrong. It's that there are things in this thesis that could send the stock basically to zero. Um, [sighs and gasps] you know, again, Iran war, bomb in the wrong place, fire in the wrong place, something gets shut down in Jordan, Red Sea gets shut down, um, can't get raw materials from from Asia, can't get their their clothing out of the of their facility. Um, insurance costs going up. That's a big thing that I'll be watching for. Like, there's a lot of things here. So, I do feel like again because I'm new to um Gash, you know, 3 to four weeks of research and because there's kind of a lot of things that could send this stock to zero, it's really about position sizing as well, right? I'm not going to sit here and get super excited and like open up a full position in this company. You have to, I think, look at this company and just be like, "Yeah, I think, you know, where are you at? Where are you at on price?"

[00:56:51]And I'll talk about that in a minute.

[00:56:53]But I mean, this is also one of those companies that could be like Zoomed where, you know, the Red Sea gets closed for a month and they're going to lose an entire month of of revenue and profits and that could be a problem. If you don't think that happens, then you're probably a lot more bullish on this company. But for me, that's the only way that I kind of reduce my risk is through position sizing. But I I like the company. I do.

[00:57:17]It's a lot better than I thought it would be. Right? When you look at what they got here, $3.35 US right now, you know, I said it was a 5.85% dividend. That was at 342. As share price goes down, this dev dividend goes higher. You know, do I really think it's going to hold 342 or can it potentially drop a little lower back down to $3? That would be interesting.

[00:57:41]Real revenue, $152 million of revenue going at 10 to 12% right now, but maybe a little bit higher in the future.

[00:57:48]They're definitely on one of their growth spurts, right?

[00:57:52]I definitely like them a little bit more in this range um this share price range here than I necessarily do up here, but we'll see. We'll see what happens, right? Um you know, kind of the thesis for me would be again, this is not a high-flying stock. I don't know that right here today I could say they're going to go back up to like $7.50, 50.

[00:58:12]But you know, if this is a company that you could pick up for $3 and in, you know, a few years they're sitting at $4.50 and you've been collecting this 6% dividend or higher for those years. I mean, you can get a 50% gain potentially here plus the dividend. This would be a very successful stock. like this is a stock that I could see, you know, providing pretty good returns over the next one to two years if they execute, right? Manufacturing comes online.

[00:58:45]Demand continues to outstrip, you know, the the manufacturing capacity because of Trump's tariffs. Trump's around for another 3 years. The bloody global trade war with China has barely started. I mean they could see growing tailwind for the three, four, five years as companies look to diversify their their manufacturing base. So this is a company I think you could look at as being potentially a long-term winner for one or two or three or four years. However, again, you you have to keep in mind that if something one of those major, you know, things happen that really shoots them in the foot with lack of execution, taking on this high debt, paying out too much cash with this dividend, taking on all this risk, right? during Iran war, right? During during shipping issues globally, any of that happens and they don't execute. This is a stock that will go back down to, you know, at least it's it's at least been down here, which is not super low, but they've been about $265 seems to be their lowest point here in 2024. So, I mean, maybe not zero. Maybe it doesn't go to zero. Although even in 2024, they didn't really experience potentially the Red Sea getting closed.

[00:59:59]But, uh, you know, they do have some downside here for sure. So, not financial advice, not a solicitation to buy, sell, or hold this stock. But, I hope that was a a good introduction to Gash Holdings. Took me about an hour, which seems to be what it takes for these kind of deep dive, long-term introductions to these companies. But, I am interested. I mean, like I said, I'm not a shareholder, but if price comes down, I will consider it. Um, I do wonder if it does get a little bit of attention at Planet Micro Cap Vegas.

[01:00:30]Probably won't get a lot. There probably won't be a lot of people looking for a a Middle Eastern company right now, but [snorts] they're doing some right things. So, I hope you like this video.

[01:00:41]Let me know if there's another any other company going to Planet Micro Cap that you want one of these deep dives on. Let me know in either the Discord or the Substack chat and I will take a look see if I have time. I am working on some other ones, right? I'm going to keep doing this probably one or two of these a week right up until June 16th where I introduce you to one of the stocks attending Planet Micro Cap in depth. My list is now complete. I do have basically a pick of human research where I have all the companies that I have graded as a B or higher that I'm trying to put a little bit more research into.

[01:01:18]I think it's a pretty good list of some pretty good stocks. So, let me know if there's one of those that you would like me to cover and thank you for watching.

[01:01:25]Thank you for being a part of Common Sense Investing. I really appreciate it and I'll see you again