NEW YORK—SmallCap Network, an online stock trading community, took a look today at three adult entertainment stocks under its Small Stock Gems header. Unfortunately, the subhead—"Adult entertainment stocks NOOF, PRVT and LNET, like adult entertainment itself, are not as profitable as one would imagine"—somewhat diminished the value of the particular gems being analyzed.
Written by John Udovich, the post began, "New Frontier Media (NASDAQ: NOOF), Private Media Group (NASDAQ: PRVT) and LodgeNet Interactive Corp. (NASDAQ: LNET) are three lesser known adult entertainment stocks or stocks that have exposure to the adult entertainment industry that you would probably not want to tell your wife about—especially if you also plan to be very thorough with your due diligence!"
The stocks come with certain assumptions attached, he continued. They are part of the "massive industry—so at least in theory, they should be profitable (Again, in theory). On the other hand, appearances can always be deceiving—especially in the adult entertainment world."
A brief but balanced look by Udovish of each company followed, revealing overall revenue losses over the past year for all three, countered by bright spots for each in certain areas of their business or at least a decided optimism regarding "current initiatives."
Interestingly, considering their different business models, two of the companies, New Frontier and Private, share almost identical 52-week highs of $2.18 and $2.19, respectively. By contrast, LodgeNet's 52-week low is $2.14, while its high is $5.09 a share.
For now, the bottom line for Udovich is, "You would think that adult entertainment would be a profitable industry to have exposure to. In reality, it appears that adult entertainment stocks NOOF, PRVT and LNET, like adult entertainment itself, may not be what they seem—when it comes to profitability right now."
One adult entertainment stock he did not assess that is also traded on the NASDAQ was FriendFinder Networks (FFN), which completed an IPO in May. With a 52-week high of $10.01, the stock is currently trading around $3.90, down about 3 percent from its previous close.