Two Franklin Healthcare Stocks Big Movers at Midday

One company up 7 percent, another 12 percent, on heavy volume

Two Franklin-based healthcare firms have seen sharp rises in their stock prices today on heavy volume. The reason for the movement is apparent in one case, but the other is a mystery.

At 1:30, shares of Psychiatric Solutions Inc. were up 7.5 percent to $62.68, a rise of $4.35 on the day. The stock, which has already doubled its daily average trading volume, was more than 9.5 percent ahead of its previous close at one point in today's trading. The behavioral healthcare provider raised its earnings guidance yesterday on the strength of two recent acquisitions.

Nursing home operator Advocat Inc., meanwhile, had risen 65 cents as of 1:30, a 12.4 percent rise, reaching a 52-week high of $5.90 on nearly twice its average daily volume. No news has come out that might have moved the over-the-counter stock, which had spent most of December on the decline after reaching its previous high on December 5th, and company officials declined to comment.

Psychiatric Solutions increased its guidance yesterday by a dime, to a range of $2.20 to $2.25. The company announced it had purchased Wellstone Regional Hospital, a 100-bed inpatient psychiatric facility in Jeffersonville, Indiana, for $18 million. PSI also said it had closed on its previously reported $11 million acquisition of Atlantic Shores Hospital, a 72-bed psychiatric inpatient facility in Fort Lauderdale, Fla. That deal's price was not disclosed, but according to a report today by Lehman Brothers analyst Adam Feinstein, PSI paid $11.5 million for Atlantic Shores. The two facilities collectively generate some $27 million a year in revenue.

The Lehman analyst wrote that he expects PSI to see further expansion in its margins during 2006 as a result of these and other acquisitons over the past year, organic revenue growth, and "future acquisitions that the company will likely undertake."