DTST

The headline metrics here are traps. FY2025 net income of $19.2M (net margin 1,389%, P/E 1.3, EPS $2.64) is almost entirely the one-time gain on sale of discontinued operations: on September 11, 2025 DTST sold its CloudFirst cloud-hosting business — the actual operating company — for ~$38.1M cash, netting $31.6M. What remains is Nexxis, a tiny voice-and-data telecom subsidiary generating just $1.38M of revenue (+13.4%) but losing money at the operating line (operating income -$3.57M, operating cash flow -$3.16M). So the 'profitable' company is really an unprofitable microcap sitting on a pile of cash. Ignore the P/E and P/S entirely — they describe a business that no longer exists.

What makes this interesting rather than a straight avoid is the balance sheet. The December 8, 2025 tender offer bought back 5,625,129 shares at $5.20 (~$29.25M), collapsing the share count 69.5% to 2.17M and leaving DTST, per the MD&A, with 'over $10.0 million in cash,' near-zero debt (liabilities/equity 0.06x), and a clean 250M-share-authorized structure. At $3.38 the entire company is valued at $7.32M — below its retained net cash. You are, on paper, buying more than a dollar of cash for roughly seventy cents, which is a genuine margin of safety and the reason this isn't a sell.