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Select Medical (SEM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Select Medical (SEM) closed at $24.20 in the latest trading session, marking a +1.81% move from the prior day. This change outpaced the S&P 500's 0.84% gain on the day. At the same time, the Dow added 0.92%, and the tech-heavy Nasdaq gained 1.06%.

Prior to today's trading, shares of the hospital and rehabilitation center operator had gained 3.89% over the past month. This has outpaced the Medical sector's gain of 2.79% and lagged the S&P 500's gain of 3.95% in that time.

Investors will be hoping for strength from SEM as it approaches its next earnings release. On that day, SEM is projected to report earnings of $0.20 per share, which would represent no growth from the year-ago period. Our most recent consensus estimate is calling for quarterly revenue of $1.34 billion, up 5.73% from the year-ago period.

It is also important to note the recent changes to analyst estimates for SEM. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. SEM is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, SEM is currently trading at a Forward P/E ratio of 17.61. This represents a no noticeable deviation compared to its industry's average Forward P/E of 17.61.

Investors should also note that SEM has a PEG ratio of 1.26 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - HMOs was holding an average PEG ratio of 1.25 at yesterday's closing price.

The Medical - HMOs industry is part of the Medical sector. This group has a Zacks Industry Rank of 40, putting it in the top 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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