Storm The Castle Stock Of The Day: Acadia Healthcare (ACHC)
Trade-Ideas LLC identified
(
) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Acadia Healthcare as such a stock due to the following factors:
- ACHC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $72.5 million.
- ACHC has traded 441,612 shares today.
- ACHC is trading at 1.75 times the normal volume for the stock at this time of day.
- ACHC crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on ACHC:
Acadia Healthcare Company, Inc. ACHC has a PE ratio of 41. Currently there are 10 analysts that rate Acadia Healthcare a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Acadia Healthcare has been 831,100 shares per day over the past 30 days. Acadia Healthcare has a market cap of $4.5 billion and is part of the health care sector and health services industry. The stock has a beta of 0.69 and a short float of 5.8% with 2.67 days to cover. Shares are up 12.9% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Acadia Healthcare as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, compelling growth in net income and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- ACHC's very impressive revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues leaped by 62.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 16.3% when compared to the same quarter one year prior, going from $25.40 million to $29.55 million.
- Net operating cash flow has increased to $50.94 million or 27.97% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.66%.
- ACADIA HEALTHCARE CO INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ACADIA HEALTHCARE CO INC increased its bottom line by earning $1.49 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($2.18 versus $1.49).
- After a year of stock price fluctuations, the net result is that ACHC's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full Acadia Healthcare Ratings Report.
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