Ricks Cabaret International [NASDAQ:RICK] – “Spotting the Line & Holding Fast” – Stock Valuation Analysis – part 2

Ricks Cabaret International (2)

Been awhile since our last update! Alot of focus and time has been made in making the next article. Which is looking like it will come out next tuesday the 8th!

Today I was just looking at our last acquisition: Ricks Cabaret International and am having a bit of a sigh with the -6% we are seeing today. However this is just the nature of the markets and our analysis was for the stock to be at $11.02 in January ’14 anything above that right now is still a bonus, so that should be comforting.

However what I want to draw your attention to in today’s mini-update is how we can monitor long term sentiment in an equity by monitoring options market pricing. I would like to briefly summarize what I have found in Ricks options pricing this morning. (HYPERLINK) to options pricing page. Refer below to the Feb 22nd 2014 contracts.

Ricks Cabaret International Feb 2

Call contracts remain relatively neutral in all four expiration’s going into May 17th 2014. Absolutely none of them lower in price. And most interestingly the Feb 22nd call at $12.50 has become 7% more expensive. Now couple this with absolutely no positive gain on any put contracts in the four expiration’s. I think we have a good reason to believe that long term sentiment on this equity is in the positive direction.

In summary, Ricks Cabaret International is going through a bit of heartburn after all the lasagna this fat cat ate at dinner in the past month. Today’s option market pricing is a Zantac to relieve the heartburn that’s frying up the weak money short term investor who is pulling out early. Wish them a heartfelt goodbye as they take their mini profit and large capital gains bill home with them to bed tonight. I look forward to sharing the next edition with you in a week! take care!

Break

Disclosures

Seal of Approval

SM Call Signs

References_Logo

Important NASDAQ:RICK Resource Pages on:

Yahoo Finance | Google Finance | Morningstar

RICK Main Page | RICK Investor Relations

SEC Filings

ADDITIONAL INFORMATION AVAILABLE UPON REQUEST

Copyright © 2013 Fat Pitch Investments. All Rights reserved. This material is for your information only and is not a solicitation, or an offer, to buy or sell securities mentioned in articles past, present or future. Fat Pitch Investments is a firm involved with equity research and valuations. The information contained herein has been obtained from sources that we believe are reliable but in no way is guaranteed by us. Furthermore, this report contains forward looking statements and projections that are based on certain assumptions and expectations that are generated by our proprietary research process. Accordingly, actual results may differ considerably from those reflected in this report due to such factors as those which are listed in the Company’s SEC filings. Any non-factual information in the report is our opinion and is subject to change without notice.

NASDAQ:RICK – NASDAQ:RICK – NASDAQ:RICK – NASDAQ:RICK – NASDAQ:RICK – NASDAQ:RICK

2 Responses

  1. Wally F. says:

    Now this is definitely one of your better picks! Have you been to any of the their places of business? I would be worried that the economy could pull the rug right from under them.

    • Fat Pitch says:

      Yes Wally! Actually I have visited a couple of their clubs. Most notably Los Angeles and Denver. Its not the first time I have done company visits. Actually I prefer to visit all business’s we invest in and write valuation analysis articles.
      Also while you would consider Rick’s to be exposed to “economic cycles” much more so than most other companies. It is very interesting to note that as the recent years have passed a larger and larger majority of patrons are “whales” which in my mind are not as affected in the tides of the economy. This is not to say they are recession proof, its just something to also note. I will not publicly comment on ethnicity of patrons, but from what I also noticed while personally visiting the clubs there seems to be a great deal of internationals who visit. Keeping an eye on the foreign markets will be even more critical in my opinion when forecasting future earnings!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>