My Top Three “Sin” Stocks

Stocks with the Potential to Award Significant Capital GainsThere’s a big push on buying green stocks, a move that has the ability to make investors feel good and make money at the same time. Here, we are talking about alternative energy stocks and companies that have mandated that their impact on the environment be one of their core values. (Read “My Top Stock Pick in the Innovative Alternative Energy Sector.”)

Then there are the stocks on the other end of the spectrum. Here I’m talking about the defense, gun, and military stocks that produce weapons and technology to defend and harm. These companies have made investors a lot of money, despite the fact that not everyone might agree with their line of business.

There are also those companies that are sought out due to their use of cheap and exploited labor. Of course, since so many goods are now made in China and other cheap labor markets in Asia and Latin America, it would be safe to say that many companies are pursuing this practice of seeking really cheap labor in order to maximize profits for investors. This is also the major reason why there are so many people looking for work across America; because companies cannot return strong margins while they’re paying the much-higher American wages or those of other Westernized countries, compared to the obscenely low wages found in places like China and Mexico and other low-wage countries.

While I’m not here to favor or condemn one group of companies, the reality is that nothing is perfect when you are operating in an extremely capitalistic global economy that needs to satisfy investors.

There’s another group of companies that some investors would likely avoid, despite the fact that these companies make money. I’m talking about the “sin” stocks for investors, which many acknowledge as those in businesses such as cigarettes, booze, and adult entertainment.

Here are my top three sin stocks that represent each of these three so-called sin areas; these are three stocks investors may want to add to their radar.

In the adult entertainment area, a company that is emerging for investors is Ricks Cabaret International, Inc. (NASDAQ/RICK). The company runs 43 gentlemen’s clubs and sports restaurants in the U.S., including establishments in New York City, Los Angeles, Miami, Philadelphia, Charlotte, Dallas/Fort Worth, Houston, Minneapolis, and Indianapolis. You may have come across one of these clubs or restaurants under names such as “Rick’s Cabaret,” “XTC,” “Club Onyx,” “Vivid Cabaret,” “Jaguars,” and “Tootsie’s Cabaret.” The company’s business may be seen as insidious by many, but the company certainly makes money for investors.

RICKS Ricks Cabaret Intl, Inc. Nasdaq CM Chart

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And if you are at one of the clubs, you are likely also drinking liquor that is produced and sold by Molson Coors Brewing Company (NYSE/TAP), which is one of the biggest brewers in the world, with sales in Canada, the United States, Europe, and elsewhere. The most recognizable brands sold by this company are “Coors” in the United States and “Molson” in Canada. Again, this company is a big moneymaker with a solid business model and worldwide recognition—an attractive combination for investors.

TAP Molson Coors Brewing Co. NYSE Chart

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Finally, you may also enjoy a cigarette along with your drink, and there’s a good chance your cigarette is manufactured by Philip Morris International Inc. (NYSE/PM), which is a global powerhouse in this industry with sales in more than 180 countries. The company, like many in its segment, has faced multiple hurdles by health organizations and governments, yet it sells seven of the world’s 15 leading cigarette brands, including the infamous “Marlboro” brand—the number one brand worldwide. (Source: Philip Morris International Inc. web site, last accessed March 7, 2014.)

Philip Morris Intl Inc. NYSE Chart

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