Select Medical (NYSE:SEM) Sees Large Volume Increase – Should You Buy?

Select Medical Holdings Co. (NYSE:SEM) shares saw an uptick in trading volume on Tuesday . 1,767,063 shares changed hands during mid-day trading, an increase of 95% from the previous session’s volume of 906,238 shares.The stock last traded at $14.72 and had previously closed at $14.39.

Analyst Upgrades and Downgrades

SEM has been the subject of several recent research reports. Mizuho started coverage on shares of Select Medical in a research report on Wednesday, April 16th. They issued an “outperform” rating and a $25.00 target price for the company. Wall Street Zen upgraded shares of Select Medical from a “hold” rating to a “buy” rating in a research report on Friday, February 21st. Benchmark raised shares of Select Medical from a “hold” rating to a “buy” rating and set a $23.00 price objective on the stock in a research note on Monday, February 24th. Finally, Royal Bank of Canada cut their target price on Select Medical from $23.00 to $19.00 and set an “outperform” rating on the stock in a research note on Wednesday, May 7th. One investment analyst has rated the stock with a hold rating and five have given a buy rating to the company. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and an average target price of $26.00.

Select Medical Stock Performance

The company has a 50-day moving average of $16.06 and a 200 day moving average of $19.45. The company has a quick ratio of 1.13, a current ratio of 1.13 and a debt-to-equity ratio of 1.37. The firm has a market capitalization of $1.91 billion, a PE ratio of 9.01, a PEG ratio of 0.64 and a beta of 1.40.

Select Medical (NYSE:SEM) last announced its quarterly earnings results on Thursday, May 1st. The health services provider reported $0.44 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.45 by ($0.01). The business had revenue of $1.35 billion for the quarter, compared to analysts’ expectations 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 for the quarter was down 24.4% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.75 EPS. Equities research analysts predict that Select Medical Holdings Co. will post 1.17 EPS for the current year.

Select Medical Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, May 29th. Shareholders of record on Thursday, May 15th will be issued a dividend of $0.0625 per share. This represents a $0.25 annualized dividend and a yield of 1.68%. The ex-dividend date is Thursday, May 15th. Select Medical’s dividend payout ratio is currently 18.66%.

Select Medical announced that its Board of Directors has initiated a stock buyback program on Thursday, May 1st that permits the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization permits the health services provider to repurchase up to 42.6% of its shares through open market purchases. Shares repurchase programs are typically a sign that the company’s management believes its stock is undervalued.

Insiders Place Their Bets

In related news, Director Parvinderjit S. Khanuja bought 21,000 shares of Select Medical stock in a transaction dated Monday, May 5th. The shares were acquired at an average cost of $15.02 per share, with a total value of $315,420.00. Following the completion of the transaction, the director now owns 65,089 shares in the company, valued at $977,636.78. The trade was a 47.63% increase in their position. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, CEO David S. Chernow sold 225,000 shares of the stock in a transaction that occurred on Monday, April 28th. The stock was sold at an average price of $18.00, for a total value of $4,050,000.00. Following the completion of the transaction, the chief executive officer now directly owns 714,516 shares in the company, valued at approximately $12,861,288. This trade represents a 23.95% decrease in their position. The disclosure for this sale can be found here. Corporate insiders own 11.60% of the company’s stock.

Hedge Funds Weigh In On Select Medical

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