Trade-Ideas LLC identified

Acadia Healthcare

(

ACHC

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) 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 $39.1 million.
  • ACHC has traded 583,644 shares today.
  • ACHC traded in a range 205% of the normal price range with a price range of $3.63.
  • ACHC traded below its daily resistance level (quality: 29 days, meaning that the stock is crossing a resistance level set by the last 29 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on ACHC:

Acadia Healthcare Company, Inc. ACHC has a PE ratio of 49. Currently there are 11 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 714,100 shares per day over the past 30 days. Acadia Healthcare has a market cap of $5.4 billion and is part of the health care sector and health services industry. The stock has a beta of 1.26 and a short float of 5.6% with 4.72 days to cover. Shares are up 19.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Acadia Healthcare as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, growth in earnings per share, compelling growth in net income and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • ACHC's very impressive revenue growth greatly exceeded the industry average of 6.6%. Since the same quarter one year prior, revenues leaped by 112.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ACADIA HEALTHCARE CO INC has improved earnings per share by 13.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. 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).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 50.7% when compared to the same quarter one year prior, rising from $22.45 million to $33.84 million.
  • Net operating cash flow has significantly increased by 233.06% to $72.92 million when compared to the same quarter last year. In addition, ACADIA HEALTHCARE CO INC has also vastly surpassed the industry average cash flow growth rate of 14.45%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 55.32% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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