Acadia Healthcare (ACHC) Marked As A Barbarian At The Gate

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Acadia Healthcare ( ACHC) as a "barbarian at the gate" (strong stocks crossing above resistance 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 $33.4 million.
  • ACHC has traded 533,363 shares today.
  • ACHC traded in a range 232.4% of the normal price range with a price range of $4.12.
  • ACHC traded above its daily resistance level (quality: 532 days, meaning that the stock is crossing a resistance level set by the last 532 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on ACHC:

Acadia Healthcare Company, Inc. ACHC has a PE ratio of 49. Currently there are 10 analysts that rate Acadia Healthcare a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Acadia Healthcare has been 502,700 shares per day over the past 30 days. Acadia Healthcare has a market cap of $4.7 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 8.7% with 8.99 days to cover. Shares are up 13% year-to-date as of the close of trading on Tuesday.

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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, increase 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 13.3%. Since the same quarter one year prior, revenues leaped by 81.6%. 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 11.8% when compared to the same quarter one year prior, going from $13.06 million to $14.59 million.
  • Net operating cash flow has significantly increased by 148.05% to $18.22 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 1.60%.
  • Compared to its closing price of one year ago, ACHC's share price has jumped by 68.95%, exceeding the performance of the broader market during that same time frame. 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.
  • ACADIA HEALTHCARE CO INC's earnings per share declined by 11.5% in the most recent quarter compared to the same quarter a year ago. 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 ($2.15 versus $1.49).

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