New York City-based Engine Capital Management acquired a $64 million stake in Acadia Healthcare during the third quarter, totaling 2.6 million shares, now the fund’s fourth-largest holding out of 27 reported positions. This move represents 7.6% of their reportable U.S. equity assets. Shares of Acadia Healthcare are currently priced at $15.47, down 63% over the past year.

In a recent Securities and Exchange Commission (SEC) filing, Engine Capital Management disclosed the new position in Acadia Healthcare, noting the $64 million valuation of nearly 2.6 million shares. The fund now holds 27 reported U.S. equity positions, with Acadia Healthcare being a significant addition at 7.6% of its assets under management.

Acadia Healthcare operates numerous behavioral healthcare facilities catering to mental health and addiction treatment needs. The company runs inpatient psychiatric hospitals, residential treatment centers, and outpatient clinics, serving a diverse patient base seeking mental health services. Acadia Healthcare is a key player in the behavioral health sector, offering specialized care and leveraging its network to address various needs.

The fund’s move into Acadia Healthcare signals a strategic bet on the growing demand for behavioral health services despite short-term turbulence. The company reported revenue growth but lowered guidance due to payor scrutiny and other challenges. With management focusing on cost-cutting measures, the stock’s drop over the past year may not fully reflect its long-term earnings potential once volumes recover.

Read more at Yahoo Finance: Why One Fund Just Bet $64 Million on a Healthcare Stock Down 63% This Past Year