Should You Hold RCI Hospitality (RICK) for the Long-Term?
Ace River Capital, an investment management company, released its third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund delivered -22.85% compared to a -3.3% and -5.1% return for the S&P 500 (SPX) and the Russell 2000 (RTY) respectively. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Ace River Capital highlighted stocks like RCI Hospitality Holdings, Inc. (NASDAQ:RICK) in the third quarter 2023 investor letter. Headquartered in Houston, Texas, RCI Hospitality Holdings, Inc. (NASDAQ:RICK) owns and operates clubs and restaurants. On October 23, 2023, RCI Hospitality Holdings, Inc. (NASDAQ:RICK) stock closed at $51.54 per share. One-month return of RCI Hospitality Holdings, Inc. (NASDAQ:RICK) was -14.14%, and its shares lost 37.25% of their value over the last 52 weeks. RCI Hospitality Holdings, Inc. (NASDAQ:RICK) has a market capitalization of $484.354 million.
Ace River Capital made the following comment about RCI Hospitality Holdings, Inc. (NASDAQ:RICK) in its Q3 2023 investor letter:
"The fund’s top position is RCI Hospitality Holdings, Inc. (NASDAQ:RICK). RICK is the only publicly traded owner of adult nightclubs in the US. Currently they own 56 clubs across 13 states and an additional 13 sports-bar restaurants with the “Bombshells” concept that has recently begun franchising. With few municipalities issuing new adult entertainment licenses these businesses function as local monopolies with excellent unit economics. The Bombshells segment works well as an alternative investment if no attractive acquisitions are available, and the share price is trading higher than the repurchase target range. (See Capital Allocation Strategy below).
The stock has seen a large drawdown of 40% from its highs in the 90s earlier this year. The company has estimated its FCF for FY24 to be in the $68M-$78M range and provided the slide below in its Q2 earnings presentation…” (Click here to read the full text)
A bustling nightclub filled with energy, illuminated by mesmerizing lights and the thumping beat of the dance music. Editorial photo for a financial news article. 8k. --ar 16:9
RCI Hospitality Holdings, Inc. (NASDAQ:RICK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held RCI Hospitality Holdings, Inc. (NASDAQ:RICK) at the end of second quarter which was 13 in the previous quarter.
We discussed RCI Hospitality Holdings, Inc. (NASDAQ:RICK) in another article and shared Greystone Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
