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What: Shares of rehab specialist and hospital operator Rehabcare Group
So what: Rehabcare, which competes with larger players such as HealthSouth
Now what: While the current-quarter results don't sound all that bad, the sharp reaction of investors today is likely because of the company's fourth-quarter guidance. Rehabcare doesn't provide an earnings-per-share number for analysts to back their models into, but instead gives guidance for various metrics in each of its businesses -- and none of those metrics looks particularly promising. The company expects margins will likely contract and that top-line growth may be nonexistent. Analysts' may now update their estimates based on the company's guidance, but based on current 2010 estimates, Rehabcare's stock is trading at a price-to-earnings multiple of less than nine. While the fourth quarter may not be stellar, that price tag could make this stock worth a closer look.
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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.