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Is Select Medical (SEM) Stock Undervalued Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Select Medical (SEM - Free Report) . SEM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 12.50. This compares to its industry's average Forward P/E of 15.03. Over the past year, SEM's Forward P/E has been as high as 20.93 and as low as 7.91, with a median of 13.90.
Investors should also note that SEM holds a PEG ratio of 0.83. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SEM's PEG compares to its industry's average PEG of 1.12. SEM's PEG has been as high as 1.50 and as low as 0.53, with a median of 0.98, all within the past year.
Another valuation metric that we should highlight is SEM's P/B ratio of 2.26. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. SEM's current P/B looks attractive when compared to its industry's average P/B of 3.46. Over the past 12 months, SEM's P/B has been as high as 4.08 and as low as 1.58, with a median of 2.35.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SEM has a P/S ratio of 0.49. This compares to its industry's average P/S of 0.59.
Finally, investors will want to recognize that SEM has a P/CF ratio of 6.67. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.45. Within the past 12 months, SEM's P/CF has been as high as 10.12 and as low as 4.02, with a median of 6.17.
These are just a handful of the figures considered in Select Medical's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that SEM is an impressive value stock right now.
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Is Select Medical (SEM) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Select Medical (SEM - Free Report) . SEM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 12.50. This compares to its industry's average Forward P/E of 15.03. Over the past year, SEM's Forward P/E has been as high as 20.93 and as low as 7.91, with a median of 13.90.
Investors should also note that SEM holds a PEG ratio of 0.83. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SEM's PEG compares to its industry's average PEG of 1.12. SEM's PEG has been as high as 1.50 and as low as 0.53, with a median of 0.98, all within the past year.
Another valuation metric that we should highlight is SEM's P/B ratio of 2.26. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. SEM's current P/B looks attractive when compared to its industry's average P/B of 3.46. Over the past 12 months, SEM's P/B has been as high as 4.08 and as low as 1.58, with a median of 2.35.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SEM has a P/S ratio of 0.49. This compares to its industry's average P/S of 0.59.
Finally, investors will want to recognize that SEM has a P/CF ratio of 6.67. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.45. Within the past 12 months, SEM's P/CF has been as high as 10.12 and as low as 4.02, with a median of 6.17.
These are just a handful of the figures considered in Select Medical's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that SEM is an impressive value stock right now.