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

OK, we just couldn't help ourselves here. We're a vice portfolio, after all, and Rick's Cabaret is about as vice as it gets. One only needs to read the most recent 10-K to understand this. By the way, the 10-K is pretty fun to read. A favorite line is: "Prior to the opening of the first Rick's Cabaret in 1983 in Houston, Texas, the topless nightclub business was characterized by small establishments generally managed by their owner...Usually, only cash was accepted. Many businessmen felt uncomfortable in such environments."

C'mon, how can this one not be in the BigVice family?

Rick's Cabaret basically attempts to standardize and build-out a high-end live adult entertainment experience. So far at least, things seems to be clicking (or are those just the clear heels I hear?) -- sales growth over the past five years has been brisk at 24.1% annualized; margins have expanded nicely (EBIT margin = 22%); and ROE has also grown (presently 19.6% ttm). It's also been gobbling up smaller local nightclubs in an attempt to increase its national presence. Management is tenured, with the CEO approaching ten years on the job. Insider ownership checks in at 18%. The balance sheet isn't pristine, but long-term solvency looks stable with a 5x interest coverage ratio.

Risks: Since Rick's target customer is the upper-end businessman, a slowdown in general corporate profits could hurt the company as well. Additionally, government regulations could adversely affect the business.