) reached a 52-week high of $25.76 on January 8 following its
accretive acquisition of Greenleaf Center a day earlier. Several
strategic investments of late and impressive fiscal third-quarter
results helped this healthcare services provider become a Zacks
Rank #1 (Strong Buy).
The company has delivered an average earnings surprise of 16.7%
over the past four quarters, including a 13.3% beat in the third
quarter. Given its expected long-term earnings growth rate of
29.0%, this stock looks like it would fit well into the portfolio
of a growth seeking investor.
On November 6, 2012, Acadia Medical reported fiscal third quarter
adjusted earnings per share (EPS) of 17 cents, beating the Zacks
Consensus Estimate by 13.3%. However, the result fell short of the
year-ago performance due to an increase in its shares outstanding,
completion of the PHC Inc. acquisition in November 2011 and an
increase in interest expenses.
On January 7, 2013, Acadia Medical purchased Greenleaf Center, a
50-bed acute inpatient psychiatric facility in Georgia, from South
Georgia Medical Center. The company noted that Greenleaf, which has
$7 million of annual revenues, will remain accretive to its 2013
Recently, Acadia Medical has made several strategic acquisitions,
including Behavioral Centers of America and AmiCare Behavioral
Centers on December 31, 2013. In November, it purchased Park Royal
Hospital, a 76-bed acute inpatient psychiatric hospital in Florida.
Also in November, the company declared its intention to buy
Arkansas based AmiCare Behavioral Centers, which operates four
inpatient psychiatric facilities. Management expects this
transaction to be accretive to its 2013 financial results. The
company is greatly optimistic about these recent developments,
which are expected to act as major catalysts for future growth.
Earnings Estimates Moving Up
The Zacks Consensus Estimate for 2012 is 64 cents, up about 23.8%
year over year. Meanwhile, over the past 30 days, the Zacks
Consensus Estimate for 2013 gained 4.3% to 98 cents per share,
representing year-over-year growth of about 52.9%.
Acadia Medical's valuation looks stretched compared to its peers by
most metrics. Based on the 2012 earnings estimate, the company is
trading at a P/E of 25.21x, which is almost 1.7 times the peer
group average of 16.63x. The price-to-book ratio of 4.10x is also
substantially higher than the peer group average of 2.10x. The
premium is warranted given a higher long-term earnings growth rate
of 29.0%, compared with the industry average 12.7%.
However, with respect to return on assets (ROA), Acadia Medical
looks attractive at 3.9%, a marginal premium to the peer group
average of 3.5%.
Acadia's price performance has been reasonably strong. Following
the release of its fiscal third-quarter results, the stock showed a
steep uptrend and is currently trading above both its 50- and
Acadia Medical is a provider of inpatient behavioral healthcare
services. As of September 30, 2012, the company operates a network
of 33 behavioral health facilities with over 2,300 licensed beds in
19 states. Acadia provides psychiatric and chemical dependency
services to its patients in a variety of settings, including
inpatient psychiatric hospitals, residential treatment centers,
outpatient clinics and therapeutic school-based programs. The
company has a market cap of $1.04 billion.
Other Zacks #1 Rank (Strong Buy) medical devices stocks include
Spherix Inc. (
) and Syneron Medical Ltd (
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