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! Nevertheless, adult entertainment stocks NOOF, PRVT and LNET are
clearly in a 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. Hence, here is a closer look at
NOOF, PRVT and LNET to see if they are worthy of further due diligence:
- New Frontier Media (NASDAQ: NOOF)
is involved in transactional television and the distribution of general motion
picture entertainment content. In addition, NOOF has a
direct-to-consumer division involved in the distribution of adult content to
websites. For fiscal 4Q2011, New Frontier Media reported that revenues fell from
$15.1 million for the same period last year down to $10.9 million. NOOF’s loss
from continuing operations was $1.3 million verses $4.8 million for fiscal
4Q2010. However, New Frontier Media did report some positive news:
Specifically, their Transactional TV segment’s international revenue grew 64%
to $5.9 million. New Frontier Media recently closed at $1.33 and has a 52 week
trading range of $1.31 to $2.18 a share.
- Private Media Group (NASDAQ: PRVT)
is a provider of adult entertainment media content for a wide range of media
platforms. For the first quarter of 2011, Private Media Group’s net sales fell
EUR 1.0 million from EUR 6.4 million to EUR 5.4 million. In addition,
PRVT reported a loss of EUR 1.0 verses EUR 1.2 million for the same period last
year. Moreover and since reporting its first quarter results, Private Media
Group has stated that they expect future growth and profitability provided they
are successful with a number of current initiatives. However and if these
initiatives fail, PRVT noted that there are no assurances that they will be able
to profitably operate in the future. Private Media Group recently closed at
$0.69 and has a 52 week trading range of $0.49 to $2.19 a share.
- LodgeNet Interactive Corp. (NASDAQ: LNET)
provides interactive media and connectivity solutions to the North American
hospitality industry and draws a portion of its revenues from adult
entertainment shown on TVs in hotels. For 1Q2011, LodgeNet Interactive Corp.
reported revenue of $107.7 million verses to $118.1 million for the same period
last year. In addition, LNET reported a net loss of $2.3 million but this was a
40% improvement compared with the $3.9 million net lost reported for 1Q2010.
LodgeNet Interactive Corp. also noted that margins have improved across all
business segments. LodgeNet Interactive Corp. recently closed at $3.16 and has a
52 week trading range of $2.14 to $5.09 a share.
The bottom line: In theory, 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 profitabilty right now.