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Is RCI Hospitality Holdings (RICK) A Good Investment Choice?

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·3 min read
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1 Main Capital, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A net return of 18.3% was delivered by the fund for the Q1 of 2021, ahead of its S&P 500 and Russell 2000 benchmark that delivered a 6.2% and 12.7% return respectively in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

1 Main Capital, in their Q1 2021 investor letter, mentioned RCI Hospitality Holdings, Inc. (NASDAQ: RICK) and shared their insights on the company. RCI Hospitality Holdings, Inc. is a Houston, Texas-based nightclub company that currently has a $616.4 million market capitalization. Since the beginning of the year, RICK delivered a 73.68% return, impressively extending its 12-month gains to 556.13%. As of April 26, 2021, the stock closed at $68.50 per share.

Here is what 1 Main Capital has to say about RCI Hospitality Holdings, Inc. in their Q1 2021 investor letter:

"RCI Hospitality (RICK) is a well-run owner and operator of gentlemen’s clubs across the country. These are highly cash generative local monopolies. The company takes the cash flow generated by these clubs and reinvests it into club acquisitions and an emerging sports bar concept called Bombshells, both of which have rapid paybacks and phenomenal cash-on-cash returns."

club, clubbing, nightclub, worship, teens, young, adult, crowd, man, male, group, date, boyfriend, girl, dynamism, clubber, guy, outline, disco, head, discoball, arm, dancer, enjoy, music
club, clubbing, nightclub, worship, teens, young, adult, crowd, man, male, group, date, boyfriend, girl, dynamism, clubber, guy, outline, disco, head, discoball, arm, dancer, enjoy, music

Pressmaster/Shutterstock.com

Our calculations show that RCI Hospitality Holdings, Inc. (NASDAQ: RICK) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, RCI Hospitality Holdings, Inc. was in 7 hedge fund portfolios, compared to 5 funds in the third quarter. RICK delivered a decent 70.31% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.