Acadia Healthcare is Tuesday's IBD Stock Of The Day, as the country's leading provider of behavioral health services holds firm in an uncertain market.
ACHC stock pulled back following an early jump in Tuesday' stock market trading, teasing a pair of early entries within a bullish base pattern. Shares traded down 1.1% at 71.17 as volume ended the session just above its daily average.
Acadia Posting Healthy Earnings
The Tennessee-based company, which develops and operates inpatient psychiatric facilities and other behavioral health operations, announced on May 3 that its first-quarter earnings had beat Wall Street estimates.
The company reported a 42.5% increase in earnings per share to $0.67, compared to predictions of $0.64. ACHC's revenue climbed 11.9% to $616.65 million vs. analysts' expectations of $606.49 million.
Looking ahead, Wall Street is projecting that ACHC will post sales of $634.95 million for the current fiscal quarter. The company reported $582.16 million in revenue for the same quarter a year ago.
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Institutional investors and hedge funds have recently added to their holdings of Acadia. Morgan Stanley owns 196,080 shares of the company's stock worth more than $12 million, Deutsche Bank AG recently increased its shares by 3.6% and First Republic Investment Management currently owns 26,205 shares of the company's stock worth $1.67 million.
In early May, CEO Chris Hunter said that Acadia has continued to expand its market reach and that it is targeting facility expansions as the best path forward for long-term growth.
"Our first pathway and best return on investment is through facility expansions, where we have an opportunity to utilize a facility's current infrastructure and leverage the existing cost structure," he said.
Acadia Healthcare Stock
Acadia's six-week cup shows a standard buy point of 76.79, according to weekly MarketSmith charts. That buy point is 10 cents above its 52-week high of 76.69, chalked up on April 20.
The cup base sits atop a much longer pattern, which formed from September to April. The stock broke out decisively from that base, then pulled back to form a second pattern perched atop the earlier base's highs. This base-on-base formation is a bullish chart set-up, showing investors supporting the stock above its prior highs.
Aggressive investors will want to watch for a break above a downward sloping trend line. This offers an early entry right around 73. Another possible early entry is based off the May 17 high of 73.73. The stock is holding firming support above its 10-week moving average.
ACHC has an IBD Composite Rating of 92 out of 99. This score is a blend of key fundamental and technical metrics to help investors determine stock's strengths and weaknesses. The best growth stocks have a Composite Rating of 90 or more. Acadia ranks first among its group of its peers in the Medical-Outpatient/Home Care industry group
Acadia also has a 94 Relative Strength Rating, an exclusive IBD Stock Checkup measurement for share price movement with a 1 to 99 score. The rating shows how a stock's price performance over the last 52 weeks holds up against all the other stocks in IBD's database.
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