#$achc

EARNING UPDATE $ACHC Acadia Healthcare Company, Inc. for quarter ending q_Jun18 – Revenue grew, Margins expanded

[s2If !current_user_can(access_s2member_level0)]Please login to read the earning update on ACHC [lwa][/s2If][s2If current_user_can(access_s2member_level0)]Acadia Healthcare Company, Inc. reported earnings (EPS) of 0.67 per share for the quarter ending q_Jun18. This is vis-vis 0.58 per share for the previous quarter ending q_Mar18, a growth of 15.5 %. Compared to last year same quarter (q_Jun17),…

Fundamentals

PREFACE Nearly $1 in every $5 spent in the U.S. will be on healthcare by the year 2024 according to a government projection released in 2015. That's a $5.4 trillion market. But there's a secret gem that lives in this world that only the top 1% are gaining access to. Sure, the biotechs best positioned to rise are companies like Celgene (CELG) with the top oncology (cancer) drug in the world, Gilead (GILD) with the incredible Hepatitis C and HIV franchises, Biogen (BBIB) with its marvelous multiple sclerosis franchise and Amgen (AMGN) which is is in many ways like a cancer drug ETF. But, while biotech companies are exploding with magnificent new discoveries, there's one corner of the market that has been totally overlooked and one company in that segment that is a crown jewel. BEHAVIORAL HEALTH Behavioral health encompasses both mental health and addiction treatment and that market has now hit $250 billion. Four of the ten leading causes of disability in the United States are mental illnesses. Here is the enormous growth coming in just the mental health segment of healthcare via Statista.

But we want to focus on a subset of this market: substance abuse. There is a gem that lives in this market. Here are the forecasts for the mental health and substance abuse services industry, also from Statista.

Now, let's find the gem inside this growing theme and dive deep into its remarkable opportunity and execution. ACADIA HEALTHCARE Acadia Healthcare (ACHC) is the leading specialty provider of behavioral health services in the US and notably, in the UK. It provides psychiatric and chemical dependency services to its patients (Source: 247wallst). Here is ACHC's all-time revenue (TTM) trend.

Revenue has grown 72% year-over-year and 150% over the last two-years. The company is openly pursuing a new goal of $4 billion in revenue by 2018, which means an additional 170% growth. A lot of the growth has come through acquisition. STAY FOCUSED Any time a company gets actively acquisitive, we must clear the table and look for organic growth as well. ACHC doesn't disappoint. The company has realized 10% annualized organic revenue growth over the last five-years. Another critical element to a company that grows by acquisition is earnings, and the trend here couldn't be more powerful. Here is the all-time net income (TTM) chart:

We see 37% growth year-over-year and 185% growth over the last two-years. This is critical: that 185% growth in after tax earnings is larger than the 150% growth in revenue. This is our empirical evidence that this marvel is indeed showing immense demand for its products through organic growth. We break news every day. Discover the Undiscovered. Get Our (Free) News Alerts Once a Day. THE HUGE OPPORTUNITY While the story feels quite compelling, it turns out the really special part of this thematic story is an opportunity that is just beginning and it's absolutely seismic. This is how the company is really going to get to that $4 billion goal within three years. We invite you to the full ACHC CML Pro research dossier to recognize this massive shift. It's this shift that has very quietly compelled institutions to accumulate fully 80% of ACHC stock as the price has dropped. Here's the two-year stock chart:

We can see the stock has tumbled of late as the 'risk-off' trade has attacked both biotech and healthcare in general. But the institutions are snapping it up because they have their fingers on the pulse of the U.S. policy shift we discuss in the full research dossier, and they certainly don't want anyone to talk about. WHY THIS MATTERS If any of the information we just covered feels like a surprise, in many ways it is. But Acadia is just one of a precious 15 'Top Picks' for CML Pro. We're talking about gems that we have identified as the single winners in exploding thematic shifts like artificial intelligence, Internet of Things, drones, biotech, cancer treatments and more. In fact, here are just two of the trends that will radically affect the future that we are ahead of:

The Internet of Things (IoT) market will be measured in trillions of dollars as of next year. CML Pro has named the top two companies that will benefit. Now let's look at cybersecurity:

Zacks Sector/Industry/Company Telescope

The story of Summer 2015 is the rise of the Consumer Discretionary sector.  

Obvious discretionary spending power is seen among the usual consumer suspects: Appliances, Apparel, and Media. Beverages look great on the Staples side. Materials like Chemicals and Paper, with a consumer bias, also turned up.

(1) Health Care is Very Attractive.  The best area is Medical Care, after the Supreme Court affirmed the Affordable Care Act.  Medical Products and Drugs look good too.  The Aging Baby Boomers keep on aging.

Acadia Healthcare Company, Inc. provides inpatient behavioral health care services. It provides psychiatric and chemical dependency services, including inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and therapeutic school-based programs.

Acadia Healthcare Company, Inc. is headquartered in Franklin, Tennessee.

(2) Consumer Discretionary turned on in summer and looks Attractive.  Home Furnishing-Appliances, Apparel, Media, and Other Cons. Discretionary industries are Very Attractive.  Non-food Retail/wholesale is Attractive.  

Based in Philadelphia, PA, Pep Boys - Manny, Moe & Jack, along with its subsidiaries, supplies tires; batteries; new and remanufactured parts for vehicles; chemicals and maintenance items; and fashion, electronics, and performance accessories. It also provides non-automotive merchandise, such as generators, power tools and personal transportation products.

The company operates in the U.S and Puerto Rico automotive aftermarket industry. It serves its customers through 800 locations.

(3) Utilities are Attractive.  The best is Utilities-Water Supply, with a California drought in its fourth year.  Air Conditioning lights up the electric utilities.

Chesapeake Utilities Corporation is a utility company engaged in natural gas distribution and transmission, propane distribution and marketing, advanced information services and other related businesses. Chesapeake's three natural gas distribution divisions serve residential, commercial and industrial customers in southern Delaware, Maryland's Eastern Shore and Florida.

The Company's natural gas transmission subsidiary operates an interstate pipeline system that transports gas from various points in Pennsylvania to Delaware and Maryland distribution divisions.

(4) Info Tech is a Market Weight industry in July.  The Computer-Office Equipment are leads the way, as does Telco Equipment.  But Electronics and Computer Software are lagging now. The hot Semiconductors fell to middle of the pack.

(5) Industrials are a Market Weight Industry.  The strong industries are Construction-Building Services and Aerospace & Defense.  Business Products and Business Services are Attractive.  Railroads and Conglomerate and Machinery show downward Zacks Rank motions.

(6) Financials are a Market Weight industry.  The rising star is Real Estate in the summer. Insurance continues to be Attractive as a cyclical play.  The Major Banks lag again.

(7) Materials showed new strength in Chemicals and Paper. These have a consumer element to them. That gives the sector a Market Weight.  Steel and Metals non-Ferrous are in the tank still.

(8) Consumer Staples rebounds to a Market Weight. Beverages get upgraded to Very Attractive.  Misc. Staples is also a Very Attractive industry.  

(9) Telcos are Unattractive.  

(10) Energy fell to an Unattractive rating.  The only solid Zacks Ranked performer is Integrated Oil companies, given the added Chemical and Retail Operations.  Coal and Alternatives are dead money for now.

What are Key Investment Strategists Saying Privately? Before you make any changes to your portfolio, I suggest that you check out our outlook for economic growth (both foreign and domestic) and comb through the industry rankings in Zacks Consensus Market Strategy: Forecasts of Future Asset Class Returns. This report, updated for July 2015, brings you a consensus of predictions from some of the world’s most respected strategists, economists and buy-side CIO’s. It could help catch portfolio-impacting trends before they develop. Free Download - Zacks Consensus Market Strategy: Future Asset Class Returns - July 2015 Best Regards, and Better Returns! —Mitch

Disclosure:  Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

July paints front-page U.S. stock trading news as tightly range-bound, with event risk in Greece. Preliminary U.S. June job additions were good at +223K. May job additions go big at +280K, as fundamentals rebounded. After revisions, April added +221K jobs.

Outside the U.S., event risk mixes with QE. A weak yen, a weak euro, and four consecutive China rate cuts create GDP growth in these regions. Mainland China, Japan, and Europe stocks were on a tear. Then speculators sold China stocks. They keep selling. Europe quarreled with Greece.

Another key question-- Does the Fed Taper tantrum of 2013 live again in late 2015?

The Fed Remains Optimistic on U.S. GDP Growth

[The Fed] remains optimistic that the economy will rebound in the second quarter. Several indicators suggest the economy is on better footing than GDP growth numbers indicate.

·         Growth in employment and real incomes is solid,

·         Household wealth is improving, and

·         The stock market is buoyant.

·         In addition, monetary policy remains highly accommodative

What are Key Investment Strategists Saying Privately? Before you make any changes to your portfolio, I suggest that you check out our outlook for economic growth (both foreign and domestic) and comb through the industry rankings in Zacks Consensus Market Strategy: Forecasts of Future Asset Class Returns. This report, updated for July 2015, brings you a consensus of predictions from some of the world’s most respected strategists, economists and buy-side CIO’s. It could help catch portfolio-impacting trends before they develop.  Free Download - Zacks Consensus Market Strategy: Future Asset Class Returns - July 2015  Best Regards, and Better Returns!  —Mitch

Disclosure:  Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

Acadia Healthcare Co (ACHC)  Today’s trade of the week required a lot of attention in order to find a suitable entry.  I was alerted to ACHC from my Turnaround strategy which shows stocks that are falling rapidly but have the potential to reverse.  The initial alert came at $66.76 but the spread was terrible and I couldn’t bring myself to take the trade.  My disappointment grew as the stock bounced over $2.00 without me – but finally the spread shrunk to a manageable 6 cents and I called the trade at $69.52.  In 2 minutes I was out of the trade at $71.31 for a profit of $1.79!