Rick's Cabaret International is a company that operates upscale gentlemen's clubs and restaurants. They have been making some decent profits at the first half of the year. The 3Q result was just released and it's a little disappointing. For the 3Q, the company made just approx $850,000 or $0.09 per share. This is actually less than half of the profits from a year ago. However, the year-to-date profit of $4.58mil is an improvement comparing to 2009's $3.41mil for the first 9 months.
The stock has came down a long way since March 2010 from $16 to the current value of approx $7. I value this stock for 3 main reasons :
- it's a profit making company and is actively acquiring lots of smaller clubs recently
- it has a pretty healthy balance sheet and I believe the company will be fairing much better as the economy recovers
- this industry has a pretty high bearer of entry and I don't foresee much of the competition that can compare with Rick's
Technically, the counter has broken the downward trendline. I believe this counter should start to move uptrend instead of the downtrend over the past 6 months. This could be a mid-long term counter and I'm prepared to hold it for a while.
Entry point : Now (whatever price below US$7)
Cut-loss : Approx US$6
*Note : This is a company that operated within a "sinful" industry. To put it blatantly, Rick's operated strip clubs so if it's against your morale principles to deal with anything "unethical", please avoid this counter.
Haha. Thanks for the moral bit. Not for me then :D
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