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Select Medical's (SEM) Growth Plans to Extend US Footprint

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Select Medical Holdings Corporation (SEM - Free Report) recently undertook a wide array of measures, primarily acquisitions and joint ventures (JVs) with renowned healthcare systems, to strengthen its critical illness recovery hospital services. The move is aimed at addressing the needs of a growing chronic and critically ill patient population across the United States.

In a bid to offer enhanced healthcare services across New Jersey and West Virginia communities, Select Medical inked a deal to purchase four long-term acute care hospitals and one satellite hospital from North Carolina’s Acuity Healthcare. Concurrently, the company entered into four JVs with AtlantiCare, Mon Health, Virtua Health and physician partners in a bid to further strengthen its New Jersey and West Virginia footprint.

Moreover, Select Medical inked a JV with Tennessee-based national health system Ascension Saint Thomas. Managed by Select Medical for more than two decades, the freestanding critical illness recovery hospital equipped with 70 beds and located on the Ascension Saint Thomas Hospital Midtown campus will now be part of the JV.

Besides, a satellite critical illness recovery hospital containing 30 beds will be constructed on the Ascension’s West campus. The total of 100 beds is expected to offer enhanced critical illness recovery services across Nashville and neighbouring communities.

The healthcare provider also collaborated with Community Health Systems’ (CYH - Free Report) unit Northwest Healthcare and acquired the long-term acute care hospital Curahealth Tucson. Besides strengthening post-acute care presence across Arizona, the move basically reflects the company’s endeavor to provide high-quality services across Tucson and neighbouring regions.

Time and again, the leading U.S. critical illness recovery hospital services provider – Select Medical, has resorted to multiple acquisitions and JVs. These efforts have not only enhanced its capabilities but have also enabled it to foray into underserved areas. With a robust network of critical illness recovery hospitals, Select Medical is positioned well to offer post-acute care services as a patient requires a substantial amount of time and care to recover from chronic diseases.

Besides, the company has a number of rehabilitation hospitals and outpatient rehabilitation clinics operating within the United States. Widespread operations have led to a strong national footprint for the company and also driven revenues. Notably, the company’s revenues have witnessed a 10-year CAGR of 7%. Though the COVID-19 pandemic initially dampened patient volumes of the company, it seems that the metric has bounced back at Critical Illness Recovery Hospital and Rehabilitation Hospital segments.

Zacks Rank & Price Performance

Shares of this Zacks Rank #2 (Buy) healthcare provider have soared 190.4% in a year compared with the industry’s rally of 28.2%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Other Stocks to Consider

Some other top-ranked stocks in the medical space include Magellan Health, Inc. (MGLN - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) . While Magellan Health sports a Zacks Rank #1 (Strong Buy), Molina Healthcare carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Magellan Health and Molina Healthcare delivered trailing four-quarter earnings surprise of 69.63% and 17.70%, on average, respectively.

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