Detroit Bear
Deep value, special situations, long-term horizon, value

Rick's Cabaret: Terribly Managed, Great Business

Rick's Cabaret (NASDAQ:RICK) is one of the more popular $112 million companies in the investing world. The firm has an easy understand business, exposure to strip clubs that no other company can match, and seemingly fantastic earnings potential.

I have followed the company for over five years, so I would like to share some thoughts on recent business decisions, management, the REIT conversion, and where I think the stock is heading.

Recent Diworsification

A pretty good investor by the name of Peter Lynch coined the phrase "diworsification" to classify companies that make investments outside of their own core competencies. This leads to a few conclusions. One, management might not know the new business that well, causing it to...

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