"What are your thoughts? What is a more positive investment...

"What are your thoughts? What is a more positive investment thesis? What did I miss?"

What you missed, I think, is that things are even worse than your post suggests.

The most recent result makes for some alarming reading:

They made a $30m acquisition on 26 June 2018, ostensibly at an EBITDA multiple of 5x to 6x (so an extra $2.5m or $3.0m of EBITDA to accrue in the half... and yet EBITDA came in totally unchanged on pcp (even after adding back non-recurring items).

Something is very wrong with the core business.

DWS's net earnings today of around $15m, are some 15% lower than they were a decade ago, despite the company having made more than $80m in acquisitions over that period.

As a result, the company is now sitting with more than $40m in net borrowings, whereas for most of its life it was managed on a net cash basis.

With Net Debt-to-EBITDA now at 1.5x, the game of continuing to acquire to plug earnings holes cannot continue for many more years.

I sort of feel sorry for the company's founder and MD/CEO (whose salary - at $300k - is not overly excessive), as well as for the other managers and employees of the company because its not for lack of trying, I don't think. It's just that I sense the business environment in which they operate is so fast-changing and dynamic, that it is incredibly hard for a small sized company like DWS, with its somewhat commoditised service offering, to remain competitively ahead of the curve at all times.

I suspect that the future for DWS will, unfortunately, continue to involve an ongoing and inexorable downward grind in the organic earning of the business, with the odd acquisition to try to stem the bleeding (as long as the balance sheet permits, that is, which will certainly not be forever.)

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