Rick's Cabaret Int'l, Inc. (RICK)

The share price has plummeted on this stock since I added it to CAPS, and I decided to defend my position. From what I can tell- anyone that gets in under $5/ share is getting in on a great opportunity. I observed RICK'S for a while on CAPS before I jumped in. I bought shares under $4- and made some profitable short term plays out of the trading range that I observed. I made a rule of buying the stock only as it went down, making a profit I was satisfied with on an upswing- and jumping out. I am a long term investor- and I generally do not assume short term risk- but I saw what I perceived as some rare opportunities to trade RICK and I took them. My problem was that I was scared of losing the gains- and I jumped ship, before the most recent market rally would have generated the greatest profit.

Rick's does not seem to have much stock market competition at the moment. RICK and its competitor VCG Holdings (VCGH) are both considered undervalued. Rick's seems to offer the greatest value for shareholders, as it offered a nice surge over $5/share during the last rally. It had been trading below $4 for a while- so a surge like that was nice to see. VCGH seems to be struggling to rebound. During the rally when Rick surged, VCGH fell. VCGH recently has been struggling for support over $2/share and seems stuck in the mid 1.50 to 2.00 range.

Some analysts are betting on a deeper and prolonged recession. I am not excited about jumping in again until I notice a repeat trend or trading pattern. RICK, now in the $4 range, has fallen in the last few regular trading sessions, but tends to regain some of what it lost in after-hours trading.

One detail worth mentioning about RICK is the executive compensation. CEO Eric Langan made a base salary of 400,000/yr in 2007, according to a Forbes profile. I do not know if his base salary changed for this year. VCGH CEO Troy Lowrie announced Dec 10 that he would draw a base salary of 700,000/yr, according to the Triangle Business Journal of Denver, CO. It is Lowrie's first time drawing a salary and it is hard to be critical of that. Still, if I were a shareholder, I would be upset in the performance of my shares as the announcement is made. RICK currently seems to be delivering more to shareholders.

I shorted at $26 but now this seems like a buy point at $13