NEW YORK, April 12, 2004 (PRIMEZONE) -- (Investrend Research Syndicate) The following is an investment opinion issued by Investrend Research Syndicate:
Rascals International (OTCBB:RSCA) has been rated "Speculative Buy/4," with a target valuation of $2, by Investrend Research analyst Robert J. Vile, CPA, CFA, in an initiating report.
"With a current market cap of less than $1.0 million, RSCA shares are selling at 0.5x our 2004 earnings estimate of $0.10 per share and 0.3x our 2005 earnings estimate of $0.20 per share. Given the company's acquisition strategy and the strong projected revenue growth, we believe the stock should sell at a price to earnings ratio of approximately 10x our estimated 2005 earnings of $0.20 per share. We believe the Company is on the verge of profitability and well positioned to take advantage of the growth in the comedy/night club market," said Vile.
Vile said Rascals has taken its experience in opening and operating profitable comedy clubs, and developed a focused business strategy, combining internal growth in different venues with accretive acquisitions, using existing full-service comedy clubs, hotel-based restaurant/clubs, and clubs located at high-traffic entertainment destination venues.
"There are three Rascals Comedy Clubs in operation, two under development, one acquisition with 9 dance clubs closing, and several comedy and dance clubs in the planning stages. The current Clubs are: Rascals Comedy Club in Ocean Township, NJ; Rascals Comedy Club at the Hilton in Cherry Hill, NJ; and the Headliners Entertainment Resorts (Rascals Comedy Club, a nightclub and the Cactus Lounge) in Jackson, Mississippi, which generated approximately $95,000 in its first weekend with well over 6,000 visitors.
"Rascals intends to build a national chain of 45 locations and establish itself as the clear leader in the comedy club industry, and believes that it will achieve critical mass at 45 club locations by 2007," the analyst stated.
The complete report is at: (http://www.investrendresearch.com).
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