Back to top

Image: Bigstock

Select Medical (SEM) Outpaces Stock Market Gains: What You Should Know

Read MoreHide Full Article

Select Medical (SEM) closed at $25.33 in the latest trading session, marking a +1.28% move from the prior day. This change outpaced the S&P 500's 0.65% gain on the day. Meanwhile, the Dow gained 0.94%, and the Nasdaq, a tech-heavy index, added 0.9%.

Coming into today, shares of the hospital and rehabilitation center operator had gained 5.84% in the past month. In that same time, the Medical sector gained 1.64%, while the S&P 500 gained 2.97%.

SEM will be looking to display strength as it nears its next earnings release, which is expected to be February 20, 2020. On that day, SEM is projected to report earnings of $0.20 per share, which would represent no growth from the year-ago period. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.34 billion, up 5.73% from the year-ago period.

Investors should also note any recent changes to analyst estimates for SEM. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.96% higher. SEM is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, SEM is holding a Forward P/E ratio of 17.99. For comparison, its industry has an average Forward P/E of 16.58, which means SEM is trading at a premium to the group.

Meanwhile, SEM's PEG ratio is currently 1.29. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Medical - HMOs stocks are, on average, holding a PEG ratio of 1.26 based on yesterday's closing prices.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 43, which puts it in the top 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Published in