On May 23, 2014, shares of
Select Medical Holdings Corporation
) scaled a new 52-week high of $14.55. With about 1.31 million
shares exchanging hands in the last trading session, the share
price moved up 3.87%. The momentum was driven by earnings strength
and continued focus on enhancement of shareholders' value. The
year-to-date return from the stock came in at 25.3%, zooming past
the S&P's return of 2.8%.
This Zacks Rank #1 (Strong Buy) healthcare provider clocked a
positive surprise of 4.2% in the first quarter taking the tally of
beat to 3 of the last 4 quarters with an average of 1.7%. Top line
improved 1.7% year over year.
With respect to enhancing shareholders' value, the board of
directors of Select Medical Holdings inflated the share buyback
program by $150 million to $500 million. The company spent $109.5
million to buy back 10 million shares in the first quarter, taking
the tally to 33.6 million shares repurchased for $283.1 million to
date. Its dividend yield of 2.75% also betters the industry average
Select Medical Holdings stays confident of delivering operating
income per share of 89-97 cents per share in 2014 on revenues of
$3.05-$3.15 billion. While the Zacks Consensus Estimate of 95 cents
earnings is near the top end of the guidance, the revenue estimate
of $3.17 bilion is above the company's expectation. Select
Medical Holdings expects adjusted EBITDA between $365.0 million and
$385.0 million and net income of 88-96 cents per share.
A steady operational and financial performance by the Select
Medical Holdings helped the Zacks Consensus Estimate to move north
as all the estimates were raised in the last 30 days. The Zacks
Consensus Estimate is currently pegged at 95 cents for 2014 (up
11.2%) and $1.01 for 2015 (up 5.2%). The expected long-term growth
rate of the stock is 12.5%.
Other Stocks to Consider
Some other healthcare providers worth considering include
Triple-S Management Corp.
Health Net, Inc
WellCare Health Plans, Inc
). While Triple-S Management sports the same Zacks Rank as Select
Medical, Health Net and WellCare Health carry a Zacks Rank #2
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TRIPLE-S MGMT-B (GTS): Free Stock Analysis
HEALTH NET INC (HNT): Free Stock Analysis
SELECT MEDICAL (SEM): Free Stock Analysis
WELLCARE HEALTH (WCG): Free Stock Analysis
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