Select Medical: A Worthwhile Investment Amid Regulatory Changes

Select Medical Holdings Corporation is one of the largest operators of critical centers, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the US. Despite a change in the regulatory environment, the company remains a prospect worth considering. The author revisited Select Medical in early October last year and found it to be a worthwhile investment opportunity.

Select Medical Holdings Corporation (SEM) is a prominent player in the healthcare industry, operating critical centers, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers across the United States. Despite a challenging regulatory environment, the company continues to present a compelling investment opportunity. This article revisits Select Medical, providing an updated perspective on its operational performance and investment prospects.

Regulatory Environment and Operational Challenges

The healthcare sector has faced significant regulatory scrutiny, with recent revelations of safety failures at Encompass Health (EHC) facilities sparking investor concern [2]. While Encompass Health’s stock has plummeted, Select Medical has shown relative resilience, with a 2.7% dip compared to EHC’s 9.7% intraday collapse [2]. This indicates that Select Medical is better positioned to navigate the regulatory landscape.

Financial Performance and Market Trends

Select Medical’s stock performance has been mixed but stable. Over the past few weeks, the stock has hovered around $14.50 to $15.00, with a slight upward trend [1]. Despite the regulatory headwinds, the company continues to operate profitably, with a 11% net profit margin [2]. This financial robustness suggests that Select Medical is well-positioned to weather the regulatory storm.

Investment Opportunities

For investors seeking exposure to the healthcare sector, Select Medical presents an intriguing opportunity. The company’s diversified business segments—Critical Illness Recovery Hospital, Rehabilitation Hospital, Outpatient Rehabilitation, and Concentra—provide a strong foundation for growth. Additionally, the company’s focus on operational efficiency and patient care quality positions it favorably against competitors.

Conclusion

While the regulatory environment poses challenges, Select Medical Holdings Corporation remains a worthwhile investment opportunity. The company’s diversified business model, strong financial performance, and operational resilience make it a prospect worth considering. As regulatory scrutiny continues, investors should monitor Select Medical’s earnings guidance and operational updates for further insights.

References

[1] https://www.forbes.com/companies/select-medical-holdings/
[2] https://www.ainvest.com/news/encompass-health-plummets-6-driving-sell-2507/