Money & Sex on the Exchange

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Life is a Cabaret! Most men know how much to pay for a lap dance, but do investors know how much to pay for the companies that provide the facilities for the shapely young entrepreneurs? People often point out that it pays to own “Sin Stocks” like alcohol and tobacco producers. However, few mention “adult nightclub” owners.

 

The industry is highly fragmented with most owners having only one nightclub. There are several publicly traded nightclub owners, Rick’s Cabaret International Inc. (Nasdaq: RICK) and VCG Holding Corporation (Nasdaq: VCGH) are the largest. In fact, RICK was in talks to purchase VCGH. Perhaps, these stocks don’t get much attention because, unlike smoking and drinking, patronizing a strip club is not something most people talk about openly. Let’s be honest, most of us have attended a bachelor party (or three), wouldn’t you feel better knowing that the money being spent was helping your bottom line?