Why One Fund Just Bet $64 Million on a Healthcare Stock Down 63% This Past Year

11 hours ago 4

Jonathan Ponciano, The Motley Fool

Sun, December 7, 2025 astatine 2:50 PM CST 5 min read

New York City-based Engine Capital Management initiated a involvement successful Acadia Healthcare during the 3rd quarter, acquiring astir 2.6 cardinal shares worthy $64 million.
The alteration represents 7.6% of reportable U.S. equity assets nether management.
Acadia Healthcare is present the fund’s fourth-largest holding retired of 27 reported positions.
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On November 14, New York City-based Engine Capital Management disclosed a caller presumption successful Acadia Healthcare (NASDAQ:ACHC), acquiring 2.6 cardinal shares valued astatine $64 million.

According to a Securities and Exchange Commission (SEC) filing dated November 14, Engine Capital Management initiated a caller presumption successful Acadia Healthcare, acquiring astir 2.6 cardinal shares. The involvement was valued astatine $64 cardinal astatine the extremity of the 3rd quarter. This transaction brought the fund’s full reported U.S. equity positions to 27.

Engine Capital’s caller presumption successful ACHC represents 7.6% of its reportable assets nether absorption arsenic of September 30.

Top holdings aft the filing:

NYSE: AVTR: $246.1 cardinal (29.2% of AUM)
NYSE: NATL: $94.7 cardinal (11.2% of AUM)
NASDAQ: LNW: $80.9 cardinal (9.6% of AUM)
NASDAQ: ACHC: $64.0 cardinal (7.6% of AUM)
NASDAQ: OFIX: $62.3 cardinal (7.4% of AUM)

As of Friday, shares of Acadia Healthcare were priced astatine $15.47, down 63% implicit the past twelvemonth and acold underperforming the S&P 500, which is up 13% successful the aforesaid period.

Metric

Value

Revenue (TTM)	$3.3 billion
Net income (TTM)	$107.4 million
Market capitalization	$1.4 billion
Price (as of marketplace adjacent Friday)	$15.47

Acadia Healthcare operates hundreds of behavioral healthcare facilities crossed the United States and Puerto Rico.
The institution focuses connected inpatient psychiatric hospitals, specialty attraction facilities, residential attraction centers, and outpatient clinics.
It serves a divers diligent basal seeking intelligence wellness and addiction attraction services.

Acadia Healthcare is simply a starring supplier of behavioral healthcare services, leveraging its wide web to code a wide scope of intelligence wellness and addiction needs. Its standard and specialized attraction offerings presumption it arsenic a cardinal subordinate successful the behavioral wellness sector.

A crisp determination into Acadia Healthcare matters due to the fact that it shows a money leaning into a assemblage facing short-term turbulence but semipermanent request tailwinds. Behavioral wellness remains 1 of the fewer healthcare categories with structurally rising need, and Acadia’s caller results hint astatine stabilization adjacent arsenic near-term profitability is nether pressure. For semipermanent investors, this benignant of contrarian build-up tin awesome that existent valuation weakness whitethorn not bespeak the company’s afloat net powerfulness erstwhile volumes retrieve and enlargement projects mature.

Engine Capital’s caller $64 cardinal presumption comes arsenic Acadia reported 4.4% year-over-year gross maturation to $851.6 cardinal and continued momentum successful same-facility admissions, up 3.3%. But the institution besides lowered full-year revenue, EBITDA, and EPS guidance amid payor scrutiny, Medicaid softness, and higher liability costs. Adjusted EBITDA fell to $173 cardinal from $194 cardinal a twelvemonth earlier.

Still, absorption is cutting 2026 capex by astatine slightest $300 cardinal and pushing toward affirmative escaped currency flow—moves that could materially amended returns erstwhile furniture additions commencement contributing. So what mightiness beryllium worthy taking away? Demand is durable, margins are fixable, and the stock’s 63% driblet implicit 12 months whitethorn person already priced successful overmuch of the pain.