Select Medical (SEM) Forays Into Indiana With Lutheran Health JV
Select Medical Corporation SEM has partnered with Lutheran Health Network of Indiana, a subsidiary of Community Health Systems (“CHS”), via a joint venture to provide critical illness recovery care and inpatient rehabilitation in Fort Wayne, IN.
This partnership results in Select Medical’s first rehabilitation hospital in Indiana and the expansion of its post-acute care throughout the state. It currently consists of 40 outpatient rehabilitation centers and three critical illness recovery hospitals.
Select Medical will manage operations and hold a majority ownership interest. It will contribute its clinical expertise and programs, which will further attract commercial payors, improving the financial performance of the joint venture.
This joint venture reflects SEM’s efforts to grow its existing networks and improve its financial results as a by-product. SEM has been quite active in pursuing opportunistic acquisitions and identifying joint ventures.
Under this joint venture, CHS will contribute its current 36-bed Lutheran Health Network Rehabilitation hospital, and a new specialty hospital will be built, providing inpatient rehabilitation and critical illness recovery services.
Hence, these growth endeavors should provide an impetus to revenues of the SEM’s Critical Illness Recovery and Rehabilitation segment, which contributed 35% and 14% to the total revenues, respectively, in 2022.
This joint venture will serve patients recovering from debilitating illnesses and serious injuries, like neurological disorders, strokes, spinal cord injury, brain injury and other complex and serious orthopedic conditions.
Select Medical operates most of its critical illness recovery hospitals as a hospital within a hospital or “HIH”. Under an HIH, it leases space from a host hospital and operates on the same campus. Lutheran Health’s acute care hospitals would refer patients to rehabilitation and critical illness recovery care and those patients will receive specialized treatments.
Price Performance
Shares of Select Medical have gained 0.9% year to date against the industry’s decline of 13.3%.
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Zacks Rank & Key Picks
Select Medical currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the broader medical sector are Amphastar Pharmaceuticals AMPH sporting a Zacks Rank #1 (Strong Buy) and The Pennant Group PNTG and Kiniksa Pharmaceuticals KNSA carrying a Zacks Rank #2 (Buy) at present.You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Amphastar Pharmaceuticals outpaced estimates in all the last four quarters, the average surprise being 35%. The Zacks Consensus Estimate for AMPH’s 2023 earnings suggests an improvement of 3.1%, while the same for revenues indicates growth of 9.4% from the corresponding year-ago reported figures. The consensus mark for AMPH’s 2023 earnings has moved 12.8% north in the past 30 days.
The Pennant Group’s bottom line outpaced estimates in one of the trailing four quarters, met the same in two and missed in one. The average earnings surprise is 3.8%.
The Zacks Consensus Estimate for PNTG’s 2023 earnings indicates a 24.6% rise, while the same for revenues suggests 8.4% growth from the prior-year reported figure.
The bottom line of Kiniksa Pharmaceuticals outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 66.2%. The Zacks Consensus Estimate for KNSA’s 2024 revenues indicates growth of 39.8% from the corresponding year-ago estimated figure.
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Select Medical Holdings Corporation (SEM) : Free Stock Analysis Report
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