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Select Medical Corporation (SEM $18.44) is a leading operator of specialty hospitals in the United States, operating 77 long-term acute care hospitals in 24 states. The company is a leading operator of outpatient rehabilitation clinics in the United States and Canada, with approximately 829 such clinics. Select also provides medical rehabilitation services on a contract basis at nursing homes, hospitals, assisted living and senior care centers, schools and worksites. Its industry group is ranked 64th, about 1/3 of the way down on IBD's 197 Industry Groups list under the heading of Medical - Nursing Homes. Meanwhile, healthcare has shown a lot of leadership - Medical-HMO and Medical-Outpatient/Homecare groups are listed 26th and 27th. Note the stocks has a strong "C" in CANSLIM - SEM's financial reports for the Mar, Jun, Sept, and Dec ’03 comparisons showed earnings improvements over the prior year of 36%, 46%, 80% and 62% respectively. Its annual earnings history is also impressive.
SEM recently violated its 200-day moving average line, but since then it has quickly repaired the damage and risen above its 50-DMA (the blue line). It faced resistance as it tried to work up through its prior highs, and on a pullback it again tested near its 50 & 200 DMAs before finding solid support. In fact, volume swelled far above average on four consecutive days of meaningful price progress to a new high close.
IMPORTANT NOTE: Select Medical Corp (SEM) was previously featured in the October '03 CANSLIM.net News. It split 2/1 on 12/23/03, and later broke down under its key 50-day moving average and struggled with a mediocre Relative Strength rank (why it was dropped from coverage in our daily reports) while many other stocks in the broader market outperformed. Its RS rank has been improving quickly while it now emerges from a better than 6-month base, and this new technical breakout is an encouraging sign that the stock may finally be ready to make more meaningful price progress.
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Prior 4 Quarterly earnings % Changes: |
| Mar '03 vs '02 +36% |
June '03 vs '02 +46% |
Sep '03 vs '02 +80% |
Dec '03 vs '02 +62% |
| Shares Outstanding: 100.8 million |
50-Day Avg Vol: 786,700 |
| Pivot Point: $17.98 (.10 above high on 01/28/04) |
Max Buy Price (+5% pivot): $18.87 |
More Info: 5-year Chart from BigCharts.com
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