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Is Select Medical (SEM) a Great Value Stock Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality 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 is trading with P/E ratio of 17.48 right now. For comparison, its industry sports an average P/E of 18.12. Over the past 52 weeks, SEM's Forward P/E has been as high as 20.93 and as low as 11.69, with a median of 13.68.

SEM is also sporting a PEG ratio of 1.25. 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 1.37. SEM's PEG has been as high as 1.50 and as low as 0.83, with a median of 0.98, all within the past year.

Investors should also recognize that SEM has a P/B ratio of 3.54. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.75. SEM's P/B has been as high as 3.63 and as low as 1.92, with a median of 2.26, over the past year.

Finally, we should also recognize that SEM has a P/CF ratio of 8.41. 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 14.76. Over the past year, SEM's P/CF has been as high as 8.63 and as low as 4.71, with a median of 5.72.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Select Medical is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SEM feels like a great value stock at the moment.


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