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Is Select Medical (SEM) a Great Value Stock 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Select Medical (SEM - Free Report) . SEM is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 14.39. This compares to its industry's average Forward P/E of 15.99. Over the past 52 weeks, SEM's Forward P/E has been as high as 20.21 and as low as 8.41, with a median of 13.84.

We also note that SEM holds a PEG ratio of 0.96. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SEM's industry has an average PEG of 1.19 right now. Over the last 12 months, SEM's PEG has been as high as 1.35 and as low as 0.56, with a median of 0.92.

Finally, we should also recognize that SEM has a P/CF ratio of 9.52. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.45. Over the past 52 weeks, SEM's P/CF has been as high as 10.23 and as low as 4.07, with a median of 6.81.

These are only a few of the key metrics included in Select Medical's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SEM looks like an impressive value stock at the moment.


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