The adult entertainment industry is anywhere from a $10 billion to a $20 billion industry, depending what source you refer to. According to freespeechonline.org, the adult entertainment industry generated $12.6 billion in 2005, with the adult Internet businesses growing 150% since 2002.
There are several ways to play in this sexy industry. The most famous company in this arena is Playboy (PLA), which is involved in most aspects of the industry including video and DVDs, television shows, documentaries, Internet entertainment, e-commerce sites, and numerous Playboy brand products. They also own the Spice brand of TV shows and products.
Other companies allow you to invest in more targeted areas of the industry including gentlemen's clubs, video producers, and television broadcasting. A couple of the stocks were up over 34% for the last half of last year.
Check out these hot stocks before investing because it’s hard to know when to pull the trigger, since the prices of some of them have become inflated during the last six months. Let’s hope that investors continue to get lucky and the bubble in these stocks hasn’t popped.
Here is the hot stock list:
Playboy [PLA]: This New York Stock Exchange company was founded by Hugh M. Hefner in 1953 in Chicago, Illinois with a $600 loan. Playboy Corporation grew to become the largest adult entertainment conglomerate in the world, with divisions covering magazines, clubs, clothing, web sites, television channels, and videos. It has a forward P/E of 23 and a Price/Sales Ratio of 1.13. The company is run by Christie Hefner, daughter of Hugh. The stock was up over 14% for the last six months of 2006.
New Frontier Media (NASDAQ:NOOF): This Boulder, Colorado based company, traded on NASDAQ, provides adult entertainment TV networks, cable television video-on-demand, satellite broadcasts, motion pictures and hotel room broadcasts. It has a forward P/E of 17 and a Price/Sales Ratio of 4.2. The stock was up over 34% for the last half of 2006.
LodgeNet Entertainment (OTC:LNET): This NASDAQ traded Sioux Falls, South Dakota company provides television broadcasts to hotels in the U.S. and internationally, including on-demand movies with mature audience entertainment. It has a forward P/E of 143 and a P/S of 1.6. The stock was up over 34% for the last half of 2006.
Private Media Group (OTCPK:PRVT): This adult media company is based in Barcelona, Spain. The company, which was founded in 1980, produces magazines, videos, DVDs and movies for broadcast television, cable, satellite, and the Internet. The stock has a very high P/E of 140 and a P/S of 5.
Rick's Cabaret International (NASDAQ:RICK): This Houston based company operates adult nightclubs in cities throughout the United States including Houston, New York, New Orleans, Charlotte, and Minneapolis. P/E is 22 and Price Sales is 1.65.
Million Dollar Saloon Inc. [MLDS.PK]: Operates an adult cabaret in Dallas, Texas. The company was founded in 1982.
Scores Holding Co. Inc. [SCRH.OB]: This New York City based company licenses its trademark to adult oriented nightclubs. P/E of 1.88 and a P/S of .9.
Interactive Brand Development Inc. [IBDI.OB]: The company, based in Deerfield Beach, Florida, provides online payment processing services for adult entertainment companies. They also own a part interest in Penthouse Media Group, and an adult TV network.
Disclosure: Author owns RICK.