August 24, 2023
Top 10 Stock Select Medical Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Select Medical – Top 10 Stock in Dow Jones U.S. Health Care Providers Index
Select Medical is listed as a top 10 stock on August 24, 2023 in the market index D.J. US Health Care because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 95 (top 95% performer), Obermatt assesses an overall strong buy recommendation for Select Medical on August 24, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Facilities |
| Index | Dividends USA, D.J. US Health Care |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Select Medical Strong Buy
| 360 METRICS | August 24, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 100 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 61 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 26 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 84 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 95 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 95 (better than 95% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Select Medical are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Select Medical. The consolidated Value Rank has an attractive rank of 100, which means that the share price of Select Medical is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 100% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 61, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 84. But the company’s financing is risky with a Safety rank of 26. This means 74% of comparable companies have a safer financing structure than Select Medical. ...read more
RECOMMENDATION: With a consolidated 360° View of 95, Select Medical is better positioned than 95% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 100), above-average growth (Growth Rank of 61), and positive market sentiment in the professional investor community (Sentiment Rank of 84), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 26), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Select Medical is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Select Medical very positive
ANALYSIS: With an Obermatt Sentiment Rank of 84 (better than 84% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Select Medical is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Select Medical. Analyst Opinions are at a rank of 57 (better than 57% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 95, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Select Medical. Finally, the Professional Investors rank is 94, which means that currently, professional investors hold more stock in this company than in 94% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 84 (more positive than 84% compared with investment alternatives), Select Medical has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 24, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 76% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Select Medical is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Select Medical Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2023, Select Medical shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Select Medical. Price-to-Sales is 81 which means that the stock price compared with what market professionals expect for future sales is lower than for 81% of comparable companies, indicating a good value for Select Medical's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 84% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 85. Compared with other companies in the same industry, dividend yields of Select Medical are expected to be higher than for 92% of all competitors (a Dividend Yield rank of 92). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a buy recommendation based on Select Medical's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Select Medical based on its detailed value metrics.
Growth Strategy: Select Medical Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), Select Medical shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Select Medical. Profit Growth has a rank of 82, which means that currently professionals expect the company to grow its profits more than 82% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 79 (above 79% of alternative investments). But Sales Growth has a below the median rank of 23, which means that, currently, professionals expect the company to grow less than 77% of its competitors, and Capital Growth also has a lower rank of 47. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Select Medical. ...read more
Safety Strategy: Select Medical Debt Financing Safety below-average
| SAFETY METRICS | August 24, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 16 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 42 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 52 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 26 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 26 (better than 26% compared with alternatives), the company Select Medical has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Select Medical is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Select Medical. Liquidity is at 52, meaning the company generates more profit to service its debt than 52% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 42, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 58% of its competitors. Leverage is also high at a rank of 16, which means that the company has an above-average debt-to-equity ratio. It has more debt than 84% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 26 (worse than 74% compared with alternatives), Select Medical has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Select Medical Top Financial Performance
| COMBINED PERFORMANCE | August 24, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 100 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 61 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 52 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 85 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), Select Medical (Health Care Facilities, USA) shares have much better financial characteristics than comparable stocks. Shares of Select Medical are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives), show above-average growth (Growth Rank of 61) but are riskily financed (Safety Rank of 26), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on Select Medical's financial characteristics. As the company Select Medical's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 100) and above-average growth (Obermatt Growth Rank of 61), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 26) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.