Select Medical Holdings (SEM - Snapshot Report)
posts four straight positive earnings surprises, sees estimates
for 2012 move higher making it a Zacks #1 Rank (Strong Buy).
Select Medical Holdings Corporation, through its subsidiaries,
operates specialty hospitals and outpatient rehabilitation
clinics. The company's Specialty Hospital segment offers long-term
acute care hospital services and inpatient acute rehabilitative
hospital care services. The company is headquartered in
Four straight Beats Lead to Stock Appreciation
SEM has topped the Zacks Consensus Estimate in each of the last
four quarters with the average surprise coming in on average 16%
ahead of expectations. These beats have ranged from a high of
$0.6 down to $0.01 on two
The surprise of $0.01 for the June 2011 quarter and September 2011
quarters saw negative reactions by the stock. The beat of $0.04
in the March 2011 quarter saw a positive move of less than 1%.
SEM Recently Reported Earnings
On February 23, 2012 the company reported revenue of $718 million
$38 million ahead of estimates and up from $637 million in the
year ago period. In
addition, earnings per
share came in at $0.25 up from $0.13 posted a year ago and $0.06
ahead of the Zacks Consensus Estimate. The stock moved higher by
5% following the report.
Earnings Estimates Bumped Up
Following the most recent earnings report, analysts bumped up
their earnings estimates for 2012. The Zacks Consensus Estimate
for 2012 EPS moved from $0.86 in October 2011 to the current
level of $0.90.
SEM has a low valuation in both absolute and relative terms.
Price to forward earnings of 9.2x is quite low, and lower than the
industry average of 10.5x. The trailing PE multiple of 9.9x is
also lower than the industry average of 11.8x. The price to book
multiple also shows SEM trading at a discount as does the price to
sales multiple. These low multiples could be the catalyst that
gets more than just aggressive growth investors into the stock.
A quick look at the chart shows the stock stuck in the $8 - $9
range for the last few months. The stock is holding above its 200
day moving average line, suggesting that a break out is probably
not too far off. SEM is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist
Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor