AAC Holdings (AAC) Is Today's Strong And Under The Radar Stock

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 AAC Holdings ( AAC) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified AAC Holdings as such a stock due to the following factors:

  • AAC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.3 million.
  • AAC is making at least a new 3-day high.
  • AAC has a PE ratio of 95.
  • AAC is mentioned 1.61 times per day on StockTwits.
  • AAC has not yet been mentioned on StockTwits today.
  • AAC is currently in the upper 20% of its 1-year range.
  • AAC is in the upper 35% of its 20-day range.
  • AAC is in the upper 45% of its 5-day range.
  • AAC is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on AAC:

AAC Holdings, Inc. provides inpatient substance abuse treatment services for individuals with drug and alcohol addiction in the United States. AAC has a PE ratio of 95. Currently there are 2 analysts that rate AAC Holdings a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for AAC Holdings has been 218,100 shares per day over the past 30 days. AAC has a market cap of $910.1 million and is part of the health care sector and health services industry. Shares are up 35.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates AAC Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its premium valuation and poor profit margins.

Highlights from the ratings report include:
  • The gross profit margin for AAC HOLDINGS INC is rather low; currently it is at 15.30%. Regardless of AAC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AAC's net profit margin of 6.34% compares favorably to the industry average.
  • This stock has increased by 4802.35% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • When compared to other companies in the Health Care Providers & Services industry and the overall market, AAC HOLDINGS INC's return on equity is below that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is somewhat low, currently at 0.75, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 5.46, which clearly demonstrates the ability to cover short-term cash needs.

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