Select Medical (NYSE:SEM) Sets New 12-Month Low - Here's Why

Key Points

• Select Medical Holdings Corporation's stock reached a new 52-week low of $14.00, with a last trading price of $14.09, signaling a potential decline in market confidence.
• Despite recent performance, several analysts maintain a positive outlook, with a consensus price target of $26.00 and five buy ratings among analysts.
• The company reported a 24.4% decline in revenue year-over-year, alongside earnings that missed estimates, reflecting ongoing challenges in the health services sector.
• Select Medical's board approved a stock repurchase plan allowing the company to buy back $1 billion in shares, indicating belief in the stock's undervaluation.

Select Medical Holdings Corporation (NYSE:SEM - Get Free Report) reached a new 52-week low during trading on Friday . The company traded as low as $14.00 and last traded at $14.09, with a volume of 21820 shares traded. The stock had previously closed at $14.14.

Analyst Upgrades and Downgrades

Several brokerages recently issued reports on SEM. Royal Bank Of Canada decreased their price objective on Select Medical from $23.00 to $19.00 and set an "outperform" rating for the company in a research report on Wednesday, May 7th. Mizuho started coverage on shares of Select Medical in a report on Wednesday, April 16th. They set an "outperform" rating and a $25.00 price objective on the stock. One research analyst has rated the stock with a hold rating and five have issued a buy rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average price target of $26.00.

Select Medical Price Performance

The company has a quick ratio of 1.16, a current ratio of 1.16 and a debt-to-equity ratio of 0.87. The company's fifty day moving average is $14.90 and its 200 day moving average is $16.58. The firm has a market cap of $1.82 billion, a price-to-earnings ratio of 10.66, a PEG ratio of 0.76 and a beta of 1.32.

Select Medical (NYSE:SEM - Get Free Report) last issued its quarterly earnings results on Thursday, May 1st. The health services provider reported $0.44 EPS for the quarter, missing the consensus estimate of $0.45 by ($0.01). The company had revenue of $1.35 billion for the quarter, compared to analyst estimates of $1.40 billion. Select Medical had a net margin of 2.81% and a return on equity of 11.04%. The business's revenue for the quarter was down 24.4% on a year-over-year basis. During the same period last year, the company posted $0.75 earnings per share. On average, equities research analysts predict that Select Medical Holdings Corporation will post 1.17 EPS for the current year.

Select Medical Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Thursday, May 29th. Shareholders of record on Thursday, May 15th were paid a $0.0625 dividend. This represents a $0.25 dividend on an annualized basis and a yield of 1.76%. The ex-dividend date was Thursday, May 15th. Select Medical's dividend payout ratio is currently 18.66%.

Select Medical declared that its board has authorized a stock repurchase program on Thursday, May 1st that permits the company to buyback $1.00 billion in outstanding shares. This buyback authorization permits the health services provider to purchase up to 42.6% of its stock through open market purchases. Stock buyback programs are often a sign that the company's board of directors believes its shares are undervalued.

Insider Activity

In other Select Medical news, Director Parvinderjit S. Khanuja purchased 21,000 shares of the stock in a transaction on Monday, May 5th. The shares were purchased at an average price of $15.02 per share, with a total value of $315,420.00. Following the completion of the transaction, the director directly owned 65,089 shares in the company, valued at $977,636.78. This represents a 47.63% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Insiders own 11.60% of the company's stock.

Institutional Investors Weigh In On Select Medical

A number of large investors have recently added to or reduced their stakes in SEM. Norges Bank bought a new position in shares of Select Medical in the fourth quarter valued at about $29,556,000. The Manufacturers Life Insurance Company raised its holdings in Select Medical by 2,552.7% in the 4th quarter. The Manufacturers Life Insurance Company now owns 1,596,414 shares of the health services provider's stock valued at $30,092,000 after acquiring an additional 1,536,234 shares during the period. Hood River Capital Management LLC lifted its position in Select Medical by 404.8% during the fourth quarter. Hood River Capital Management LLC now owns 1,755,733 shares of the health services provider's stock worth $33,096,000 after acquiring an additional 1,407,902 shares during the last quarter. Invesco Ltd. boosted its holdings in shares of Select Medical by 48.6% during the fourth quarter. Invesco Ltd. now owns 2,643,943 shares of the health services provider's stock worth $49,838,000 after acquiring an additional 864,852 shares during the period. Finally, Bridgeway Capital Management LLC acquired a new position in shares of Select Medical in the fourth quarter valued at approximately $14,074,000. Institutional investors own 89.48% of the company's stock.

About Select Medical

Select Medical Holdings Corporation, through its subsidiaries, operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States. It operates in four segments: Critical Illness Recovery Hospital, Rehabilitation Hospital, Outpatient Rehabilitation, and Concentra.