Author Topic: RICK - RCI Hospitality  (Read 14170 times)

DTEJD1997

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Re: RICK - RCI Hospitality
« Reply #40 on: October 02, 2016, 06:55:31 AM »
Hey everybody!

I was recently working late and drove down 8-Mile road to get home.  It was a Friday night.  My car accidentally pulled into the "Penthouse" club.  This is allegedly the premier Detroit strip club.  The time of night was around 10 PM.  The valet parking charge was $8.  Cover was $15.

I figured I would go in and see what was going on.  The club was crowded but not excessively so.   Lots of the patrons looked kind of grungy.  However, a lot of the strippers looked even more so.  Most of the people didn't look like they were having a good time, same thing with the strippers.  Most of the strippers had more than one tattoo.  A couple had shaved heads.  Several were dangerously thin, looking strung out on drugs.  Most of them did not look appealing at all.  They looked even more dangerous than the patrons.

A waitress did not ask me if I wanted a drink.  I stayed for maybe 15-20 minutes.  A total waste of time & money.  I guess my compatriot at work is right.

If this is the premier club in Detroit, I shudder to think what the others are like.  Perhaps this is problem limited to Detroit?  Or if not, a problem with the industry?

All I know is that I wasted 20 minutes of my time and $23.  I won't be back.  I would not recommend it to friends...


TedKord

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Re: RICK - RCI Hospitality
« Reply #41 on: October 11, 2016, 06:21:16 AM »
RICK will be holding a 4Q & FY16 conf call on 10/13 instead of waiting for their regularly scheduled 12/14 call. They claim that they want to share exciting developments now rather than wait and they are appearing at a couple conferences and want to be able to speak freely. RICK doesn't trade with the kind of volume that magnifies short term news, but this sounds like a positive development.

Foreign Tuffett

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Re: RICK - RCI Hospitality
« Reply #42 on: October 15, 2016, 12:28:04 AM »
My overall take on the conference call was mildly positive. It is good to hear that they're moving away from Robust, refinancing debt, and continuing the share buybacks. Ditto for selling two under performing clubs. I am somewhat neutral on opening more company owned Bombshells. It would have been great to hear of a contract being signed with a Bombshells franchisee.


TedKord

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Re: RICK - RCI Hospitality
« Reply #43 on: November 09, 2016, 11:41:49 AM »
For all the noise generated today on coal, steel, pharma or hospitals, I think RICK could be one of the real losers. Any short term actions to stem the flow of immigrants will negatively affect RICK. I don't know what percent of RICK's independent contractors are here on various visas, but I'll bet it's pretty high. I think I'm going to trim my position.

DooDiligence

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Re: RICK - RCI Hospitality
« Reply #44 on: November 09, 2016, 06:51:08 PM »
For all the noise generated today on coal, steel, pharma or hospitals, I think RICK could be one of the real losers. Any short term actions to stem the flow of immigrants will negatively affect RICK. I don't know what percent of RICK's independent contractors are here on various visas, but I'll bet it's pretty high. I think I'm going to trim my position.

What's your position on trim?

(sorry couldn't resist - our new president says it's OK)
abc 2.6 | abev 1.6 | aapl 0.9 | bbh 3.3 | brk.b 10.0 | chtr 4.2 | cvs 5.7 | dva 5.5 | dis 4.1 | ew 2.1 | gpc 2.8 | mo 6.1 | nvo 5.1 | sftby 2.3 | vde 4.2

(%'s held @ cost, PV allos are slightly 2 significantly higher. includes a slowly dwindling cash pile.)

-----

https://twitter.com/tunawish

TedKord

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Re: RICK - RCI Hospitality
« Reply #45 on: November 10, 2016, 04:26:34 AM »
10k, sold 2k yesterday

TedKord

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Re: RICK - RCI Hospitality
« Reply #46 on: November 10, 2016, 04:29:12 AM »
There's a lot I like about the stock: low P/E, good capital allocation, decent margins. It is a strip club. There's only so much money you can invest in a company like this.

JayGatsby

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Re: RICK - RCI Hospitality
« Reply #47 on: February 13, 2017, 03:50:55 PM »
Bit from their call yesterday I thought people might find interesting:

Quote
Darren McCammon

Fantastic okay good. Okay. So I have a little bit of an off-base question here. I also would like to congratulate you on your focus and management's focus on capital allocation and free cash flow. You've been doing a great job. I wonder -- I heard that to book the Outsiders, had something to do with your -- I don't know change in views. Is that true?

Eric Langan

Certainly. I've read the books a couple of times. I even have an audio -- an audio book in my phone. I guess the big thing was -- I'm from the strip club business. I'll be honest. I started out as a manager of strip clubs, and we went public and we built into this company and we've kind of grown and grown. And so we have financial advisors that were telling us you have to have the growth, you need to get the top-line growing keep this going. And so we are focused on those things. And I think we did well with what our focus was. And the difference in that book has really taught us that the top-line is really not important. What's important as how much cash can we generate? And how are we reallocating that cash? How are we either returning to shareholders or creating more value for the shareholders with that cash? And what it really taught it me, we were always told, our paper is cheap, you can write stock checks all day long. Well of course, the investment banks love that, because theyre making fees. And we were learning as I start looking at it -- wait a minute, this is the most expensive money and outsiders look really taught me how expensive those stock checks were.

And so now we use the formula and it really turned every decision into simple math. We know what our return is buying our own assets. So why would we pay more and I looked at some of deal weve done. Some of them were great deals. In 2008 we were making some fantastic deals. And some of the deals in 2011 and 2012 weren't so great, because our stock was so low, but we had gotten caught up in that write those paper checks, write those paper checks, the market will catch-up, the market will catch-up. And that book really kind of brought the thinking around to figuring out, okay, this is why -- that and -- another shareholder out of California, who got involved in the company, that really helped with that a lot, and got us to read the book. So it really helped. Its made a big difference and basically all of our decision making.

Darren McCammon

Thanks for that color there. That actually helps quite a bit from a long-term point of view?

Eric Langan

I mean, weve always been consistent with our philosophy. We just had to change the philosophy. That was the problem. We had our own philosophy I think there for a long time when we were just looking for that top-line growth. I mean, if you look -- I laugh you know, [indiscernible] I said this is the first year that we had top-line growth was negative $500,000, and our stock's performing better than its ever performed. So its like okay hold on a second. Just dont approve that focus on the cash and as they say, cash is king. And I think it's going to open up a lot of opportunities for us. There is a lot of acquisitions out there, that are available to us right now, and were negotiating and slowly and surely, we're teaching owners that this is what the market's going to pay you. You can either keep operating your club, or you can sell to us.
http://seekingalpha.com/article/4044636-rci-hospitality-holdings-rick-ceo-eric-langan-q1-2017-results-earnings-call-transcript?part=single

Gregmal

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Re: RICK - RCI Hospitality
« Reply #48 on: February 13, 2017, 04:04:13 PM »
Bit from their call yesterday I thought people might find interesting:

Quote
Darren McCammon

Fantastic okay good. Okay. So I have a little bit of an off-base question here. I also would like to congratulate you on your focus and management's focus on capital allocation and free cash flow. You've been doing a great job. I wonder -- I heard that to book the Outsiders, had something to do with your -- I don't know change in views. Is that true?

Eric Langan

Certainly. I've read the books a couple of times. I even have an audio -- an audio book in my phone. I guess the big thing was -- I'm from the strip club business. I'll be honest. I started out as a manager of strip clubs, and we went public and we built into this company and we've kind of grown and grown. And so we have financial advisors that were telling us you have to have the growth, you need to get the top-line growing keep this going. And so we are focused on those things. And I think we did well with what our focus was. And the difference in that book has really taught us that the top-line is really not important. What's important as how much cash can we generate? And how are we reallocating that cash? How are we either returning to shareholders or creating more value for the shareholders with that cash? And what it really taught it me, we were always told, our paper is cheap, you can write stock checks all day long. Well of course, the investment banks love that, because theyre making fees. And we were learning as I start looking at it -- wait a minute, this is the most expensive money and outsiders look really taught me how expensive those stock checks were.

And so now we use the formula and it really turned every decision into simple math. We know what our return is buying our own assets. So why would we pay more and I looked at some of deal weve done. Some of them were great deals. In 2008 we were making some fantastic deals. And some of the deals in 2011 and 2012 weren't so great, because our stock was so low, but we had gotten caught up in that write those paper checks, write those paper checks, the market will catch-up, the market will catch-up. And that book really kind of brought the thinking around to figuring out, okay, this is why -- that and -- another shareholder out of California, who got involved in the company, that really helped with that a lot, and got us to read the book. So it really helped. Its made a big difference and basically all of our decision making.

Darren McCammon

Thanks for that color there. That actually helps quite a bit from a long-term point of view?

Eric Langan

I mean, weve always been consistent with our philosophy. We just had to change the philosophy. That was the problem. We had our own philosophy I think there for a long time when we were just looking for that top-line growth. I mean, if you look -- I laugh you know, [indiscernible] I said this is the first year that we had top-line growth was negative $500,000, and our stock's performing better than its ever performed. So its like okay hold on a second. Just dont approve that focus on the cash and as they say, cash is king. And I think it's going to open up a lot of opportunities for us. There is a lot of acquisitions out there, that are available to us right now, and were negotiating and slowly and surely, we're teaching owners that this is what the market's going to pay you. You can either keep operating your club, or you can sell to us.
http://seekingalpha.com/article/4044636-rci-hospitality-holdings-rick-ceo-eric-langan-q1-2017-results-earnings-call-transcript?part=single

What an awesome and honest answer. This was one of my best performing positions last year. Was actually a little disappointed exiting the position because everything was saying "this time its different" although history says this is a dud at these levels. Hearing this guy talk like that really reinforces what an open minded, shareholder friendly management can do. Kudos to him for that.

BTShine

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Re: RICK - RCI Hospitality
« Reply #49 on: February 13, 2017, 06:41:44 PM »
Thanks to their proper capital allocation it's been a fantastic investment.  Current FCF yield to equity is around 11%.