Are Investors Undervaluing Select Medical (SEM) Right Now?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Select Medical (SEM). SEM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another notable valuation metric for SEM is its P/B ratio of 2.10. 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. This stock's P/B looks attractive against its industry's average P/B of 3.58. SEM's P/B has been as high as 3.03 and as low as 1.82, with a median of 2.31, over the past year.
Finally, we should also recognize that SEM has a P/CF ratio of 9.29. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 20.75. Over the past 52 weeks, SEM's P/CF has been as high as 10.57 and as low as 6.40, with a median of 8.41.
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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Select Medical Holdings Corporation (SEM) : Free Stock Analysis Report