Weakness Seen in Select Medical Holdings (SEM) Estimates: Should You Stay Away?

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Select Medical Holdings Corporation SEM, which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in SEM.

A key reason for this move has been the negative trend in earnings estimates revisions. For the full year, we have seen one estimate moving down in the past 60 days, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from $1.05 a share two months ago to its current level of $1.04.

Also, for the current quarter, Select Medical Holdings has seen one downward estimate revision, dragging the consensus estimate down to 21 cents a share from 24 cents.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 21.9% in the past month.

Select Medical Holdings Corporation Price and Consensus

Select Medical Holdings Corporation Price and Consensus | Select Medical Holdings Corporation Quote

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Medical - HMOs industry, you may instead consider a better-ranked stock - Molina Healthcare, Inc MOH. The stock currently holds a Zacks Rank #1 (Strong Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank stocks here.

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