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Is Select Medical (SEM) Stock Undervalued Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Select Medical (SEM - Free Report) . SEM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 14.75, while its industry has an average P/E of 18.40. Over the past year, SEM's Forward P/E has been as high as 20.21 and as low as 11.59, with a median of 14.65.

Investors should also note that SEM holds a PEG ratio of 0.98. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SEM's industry has an average PEG of 1.42 right now. Over the past 52 weeks, SEM's PEG has been as high as 1.35 and as low as 0.77, with a median of 0.98.

Finally, investors will want to recognize that SEM has a P/CF ratio of 9.98. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.99. SEM's P/CF has been as high as 10.23 and as low as 4.62, with a median of 7.59, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Select Medical is likely undervalued currently. And when considering the strength of its earnings outlook, SEM sticks out at as one of the market's strongest value stocks.


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