Stock (Symbol) |
Acadia Healthcare (ACHC) |
Stock Price |
$69 |
Sector |
| Healthcare |
Data is as of |
| November 12, 2015 |
Expected to Report |
| Feb 9 – Feb 15 |
Company Description |
 Acadia Healthcare is a provider of behavioral healthcare services. The Company develops and operates inpatient psychiatric facilities, residential treatment centers, group homes, substance abuse facilities and facilities providing outpatient behavioral healthcare services to serve the behavioral health and recovery needs of communities. It operates in two segments: U.S. Facilities and U.K. Facilities. The Company operated approximately 78 behavioral healthcare facilities with over 5,800 beds in approximately 24 states, the United Kingdom and Puerto Rico. Source: Thomson Financial |
Sharek’s Take |
 Acadia Healthcare (ACHC) is one of the fastest growing companies in the stock market, and operates behavior health facilities in the US as well as the UK. Acadia has been doubling profits every 2 yrs by (1) expanding existing locations, to add more beds (2) opening new locations, or adding new beds, in existing markets that get filled immediately and (3) acquiring other companies in the same industry. ACHC expanded into the UK in July 2014 with its buy of Partnerships in Care for cash (yes cash) which was the 2nd largest provider of behavior health services in the UK. Since ACHC paid cash, the extra profits are flowing to EPS. The only issue is I paid 38x profits for the stock back in August when the stock market was high. At the time the best stocks were going higher even if they had high P/Es. Then the market fell and so did ACHC, especially when hospitals and healthcare staffing firms started lowering guidance. But last qtr this company beat the street, the stock rebounded, and now looks good. Now ACHC sells for just 25x 2016 profit estimates and is a good value as profits are set to grow 31% the next three qtrs. This qtr ACHC is $69 and I feel is worth $88 next year and $104 in 2017, giving upside of 28% and 51% to its Fair Value. |
One Year Chart |
 ACHC was expected to have 26% profit growth and beat the street, reporting 35% growth as revenue jumped 63%. 2016’s profit estimate increased from $2.67 to $2.75. The P/E of 25 is good standing next to the Est. Long Term Growth Rate is 27% a year. |
Fair Value |
 In both 2013 and 2014 ACHC had a median P/E ratio of 34. My estimate of 32 times earnings is less, and still gives the stock significant upside in 2016 and 2017. This looks to be a solid stock and is a good investment, at this price range. |
Bottom Line |
 The ten-year chart looks great outside of the recent correction. Excellent profit growth each year. This is one of the fastest growing companies you can purchase stock in.
Acadia Healthcare is growing like a weed by expanding in existing markets and acquiring franchises in others. The only issue is I purchased the stock higher and am now underwater. For the 2nd straight qtr ACHC ranks 7th in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
7 of 32Aggressive Growth Portfolio 7 of 13Conservative Stock Portfolio N/A |
