Ricks Cabaret Intl (NASDAQ:RICK)

Recall that we have removed RICK from the GeoBargain list. We just do not see how the company will meet its 2010 September guidance due the moderation of economic growth.

We had originally coded RICK as GeoBargain on August 13, 2009 at $9.05. The stock reached a high of $16.05 during the first quarter of 2010 and currently trades at $7.27.

RICK shares are $3.00 off their high of $16.05. On February 6, 2010 we commented:

"The company also announced that it has entered into an acquisition agreement with VCG Holding Corp. We are not sure how investors will react to this news in this timid market. Taking some shares off the table may not be a bad idea given that the stock has increased nicely from when we coded it as a GeoBargain on August 12, 2009 at $8.53."

We were worried about dilution even though the company maintained 2009 guidance. After a brief pause, RICK actually reached a 52 week high of $16.05. It has since pulled back and the acquisition of VCG is now off the table.  It is possible that investors may soon flock to RICK shares as some uncertainty subsided.

GeoBargain Ricks Cabaret reported financial results after the close today.

Temporary expenses associated with acquisition activities and aggressive marketing costs resulted in the company missing analyst estimates by $0.05. However  RICK has maintained its guidance of $0.95 to $1.05. The company also announced that it has entered into an  acquisition agreement with VCG Holding Corp. We are not sure how investors will react to this news in this trepid market.  Taking some shares off the table may not be a bad idea given that the stock has increased nicely from when we coded it as a GeoBargain on August 12, 2009 at $8.53.

Yesterday, The GeoTeam® coded Ricks Cabaret as a GeoBargain. The reason we made this decision was due to full year September 2010 analyst estimates that show 51% growth in earnings per share and an associated low PEG ratio of 0.28.   Its possible that that stock may experience short term resistance due to the fact that growth will not be significant until 2010. GeoTeam is taking a small position in the stock.   Please note that RICK currently meets only 6 of 10 GeoBargain criteria.