Strong On High Relative Volume: Select Medical Holdings (SEM)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Select Medical Holdings ( SEM) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Select Medical Holdings as such a stock due to the following factors:

  • SEM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.9 million.
  • SEM has traded 68,754 shares today.
  • SEM is trading at 2.79 times the normal volume for the stock at this time of day.
  • SEM is trading at a new high 5.09% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SEM with the Ticky from Trade-Ideas. See the FREE profile for SEM NOW at Trade-Ideas

More details on SEM:

Select Medical Holdings Corporation, through its subsidiary, Select Medical Corporation, operates specialty hospitals and outpatient rehabilitation clinics in the United States. It operates in two segments, Specialty Hospitals and Outpatient Rehabilitation. The stock currently has a dividend yield of 2.6%. SEM has a PE ratio of 16.6. Currently there are no analysts that rate Select Medical Holdings a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Select Medical Holdings has been 913,700 shares per day over the past 30 days. Select Medical has a market cap of $2.0 billion and is part of the health care sector and health services industry. The stock has a beta of 0.59 and a short float of 6.1% with 9.54 days to cover. Shares are up 5% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Select Medical Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • SEM's revenue growth trails the industry average of 20.6%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, SELECT MEDICAL HOLDINGS CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • SELECT MEDICAL HOLDINGS CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SELECT MEDICAL HOLDINGS CORP increased its bottom line by earning $0.91 versus $0.82 in the prior year. For the next year, the market is expecting a contraction of 3.8% in earnings ($0.88 versus $0.91).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Stocks Rise Sharply, Facebook Ignites a Nasdaq Rally

Stocks Rise Sharply, Facebook Ignites a Nasdaq Rally

Jim Cramer: Visa Is a Technology Company That Masquerades as a Financial Company

Jim Cramer: Visa Is a Technology Company That Masquerades as a Financial Company

Jim Cramer: Chipotle Shares Are Probably Done Going Down

Jim Cramer: Chipotle Shares Are Probably Done Going Down

Jim Cramer: This Is a Sad Time for Southwest Airlines

Jim Cramer: This Is a Sad Time for Southwest Airlines

Jim Cramer Just Spoke to Larry Kudlow About the China Trade Negotiations

Jim Cramer Just Spoke to Larry Kudlow About the China Trade Negotiations