Select Medical Crafts a 52-Week High - Analyst Blog

On April 1, 2014, shares of Select Medical Holdings Corporation SEM reached a new 52-week high of $12.72. Shares gained almost 48.1% in the 1-year period.

With respect to earnings performance, the company delivered positive earnings surprise in 2 of last 4 quarters. In the last reported quarter, operating earnings of 21 cents per share, although down year–over–year, successfully surpassed the Zacks Consensus Estimate.

Additionally, for full-year 2014, the company expects operating earnings in the 84–93 cents per share range, higher than that recorded in 2013. The Zacks Consensus Estimate for full-year 2014, pegged at 91 cents, is closer to the upper end of the guidance, also translating into a year-over-year improvement of 0.83%.

Fourth-quarter and full-year 2013 top-line figures for Select Medical improved year over year. In fact, management remained optimistic about the company prospects and expects 2014 operating revenues to grow in the range of $3.05–$3.15 billion, representing a decent improvement from $2.97 billion reported in 2013.

The capital deployment initiatives of the company are also impressive. The company repurchased shares under its previous authorization in 2013 and extended it till Mar 31, 2015.

Select Medical's year-to-date return of 8.96% was higher than the S&P 500's return of 2.00% and that of the other industry players, with HEALTHSOUTH Corp. HLS and USMD Holdings, Inc. USMD recording 6.99% and -37.10% returns, respectively.

Select Medical currently carries a Zacks Rank #4 (Sell). Aetna Inc. AET is a better-ranked stock in the sector with a Zacks Rank #2 (Buy) and is worth considering.