Select Medical (NYSE:SEM) Shares Gap Down - Should You Sell?

Select Medical Holdings Co. (NYSE:SEM - Get Free Report) gapped down prior to trading on Friday . The stock had previously closed at $15.20, but opened at $14.52. Select Medical shares last traded at $14.92, with a volume of 392,205 shares.

Wall Street Analyst Weigh In

Several brokerages recently weighed in on SEM. Benchmark raised shares of Select Medical from a "hold" rating to a "buy" rating and set a $23.00 price target for the company in a research report on Monday, February 24th. Wall Street Zen upgraded Select Medical from a "hold" rating to a "buy" rating in a research note on Friday, February 21st. Royal Bank of Canada dropped their price objective on Select Medical from $23.00 to $19.00 and set an "outperform" rating on the stock in a research report on Wednesday, May 7th. Finally, Mizuho initiated coverage on Select Medical in a research report on Wednesday, April 16th. They issued an "outperform" rating and a $25.00 target price for the company. One investment analyst has rated the stock with a hold rating and five have issued a buy rating to the stock. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus price target of $26.00.

Select Medical Price Performance

The stock has a market capitalization of $1.95 billion, a P/E ratio of 9.20, a PEG ratio of 0.64 and a beta of 1.34. The company has a debt-to-equity ratio of 1.37, a quick ratio of 1.13 and a current ratio of 1.13. The firm has a fifty day moving average price of $15.68 and a two-hundred day moving average price of $17.56.

Select Medical (NYSE:SEM - Get Free Report) last posted its earnings results on Thursday, May 1st. The health services provider reported $0.44 earnings per share for the quarter, missing analysts' consensus estimates of $0.45 by ($0.01). The firm had revenue of $1.35 billion during the quarter, compared to the consensus estimate of $1.40 billion. Select Medical had a net margin of 3.23% and a return on equity of 14.04%. The firm's revenue was down 24.4% compared to the same quarter last year. During the same period in the prior year, the company posted $0.75 EPS. As a group, analysts expect that Select Medical Holdings Co. will post 1.17 EPS for the current fiscal year.

Select Medical Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Thursday, May 29th. Shareholders of record on Thursday, May 15th were given a $0.0625 dividend. The ex-dividend date was Thursday, May 15th. This represents a $0.25 annualized dividend and a yield of 1.65%. Select Medical's payout ratio is presently 18.66%.

Select Medical announced that its Board of Directors has initiated a share repurchase plan on Thursday, May 1st that allows the company to buyback $1.00 billion in shares. This buyback authorization allows the health services provider to reacquire up to 42.6% of its shares through open market purchases. Shares buyback plans are generally an indication that the company's board of directors believes its stock is undervalued.

Insider Transactions at Select Medical

In other news, Director Parvinderjit S. Khanuja purchased 21,000 shares of the stock in a transaction on Monday, May 5th. The shares were acquired at an average price of $15.02 per share, with a total value of $315,420.00. Following the completion of the acquisition, the director now directly owns 65,089 shares of the company's stock, valued at $977,636.78. This trade represents a 47.63% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the SEC, which is available through the SEC website. Also, CEO David S. Chernow sold 225,000 shares of the stock in a transaction on Monday, April 28th. The stock was sold at an average price of $18.00, for a total transaction of $4,050,000.00. Following the completion of the sale, the chief executive officer now directly owns 714,516 shares of the company's stock, valued at approximately $12,861,288. This trade represents a 23.95% decrease in their ownership of the stock. The disclosure for this sale can be found here. 11.60% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Select Medical

A number of institutional investors have recently bought and sold shares of the business. Smartleaf Asset Management LLC boosted its stake in shares of Select Medical by 179.0% in the fourth quarter. Smartleaf Asset Management LLC now owns 2,296 shares of the health services provider's stock worth $43,000 after acquiring an additional 1,473 shares during the period. Caitong International Asset Management Co. Ltd boosted its stake in Select Medical by 61.6% in the 1st quarter. Caitong International Asset Management Co. Ltd now owns 2,703 shares of the health services provider's stock worth $45,000 after purchasing an additional 1,030 shares during the period. BI Asset Management Fondsmaeglerselskab A S purchased a new stake in Select Medical during the 1st quarter valued at approximately $60,000. Covestor Ltd raised its position in shares of Select Medical by 33.5% during the fourth quarter. Covestor Ltd now owns 4,955 shares of the health services provider's stock valued at $93,000 after buying an additional 1,244 shares during the last quarter. Finally, Advisors Asset Management Inc. lifted its holdings in shares of Select Medical by 168.2% in the first quarter. Advisors Asset Management Inc. now owns 6,301 shares of the health services provider's stock worth $105,000 after buying an additional 3,952 shares in the last quarter. Hedge funds and other institutional investors own 89.48% of the company's stock.

Select Medical Company Profile

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.