Western Standard Sells Entire Select Medical Position Ahead of $3.9 Billion Buyout
Key Points
Sold 2,064,021 shares of Select Medical Holdings; estimated transaction value of $32.30 million based on quarterly average pricing.
Quarter-end position value decreased by $30.65 million, reflecting both trading activity and stock price movement.
Change represented 16.98% of 13F reportable assets under management.
Post-trade, Western Standard LLC holds zero shares, valued at $0.
The position previously accounted for 14.1% of the fund's AUM as of the prior quarter.
On May 5, 2026, Western Standard LLC reported selling out of Select Medical Holdings (NYSE:SEM), with an estimated $32.30 million transaction value based on quarterly average pricing.
What happened
According to its SEC filing dated May 5, 2026, Western Standard LLC exited its position in Select Medical Holdings by selling 2,064,021 shares. The estimated value of these trades was $32.30 million, calculated using the average closing price during the first quarter of 2026. The quarter-end value of the Select Medical Holdings stake decreased by $30.65 million, reflecting both the sale and stock price changes.
What else to know
- Western Standard LLC fully liquidated its Select Medical Holdings position.
- Top holdings after the filing:
- NYSE:GDOT: $39.79 million (20.9% of AUM)
- NYSE:CODI: $24.66 million (13.0% of AUM)
- NYSE:TFX: $22.11 million (11.6% of AUM)
- NASDAQ:IOSP: $16.56 million (8.7% of AUM)
- NYSE:OSG: $10.45 million (5.5% of AUM)
- As of May 4, 2026, shares of Select Medical Holdings were priced at $16.44, up 13.5% over the past year, lagging the S&P 500 by 9.2 percentage points.
Company overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $5.52 billion |
| Net income (TTM) | $133.53 million |
| Dividend yield | 1.52% |
| Price (as of market close May 4, 2026) | $16.44 |
Company snapshot
- Operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers, generating revenue primarily from patient care services and occupational health programs.
- Business model is based on providing specialized healthcare and rehabilitation services across inpatient and outpatient settings, with diversified income streams from both long-term acute care and outpatient therapy.
- Main customers include patients requiring intensive medical rehabilitation, employers seeking occupational health solutions, and healthcare payers across the United States.
Select Medical Holdings operates a national network of hospitals, clinics, and occupational health centers.
What this transaction means for investors
Western Standard is a hedge fund focused on small-cap stocks that only accepts qualified high-net-worth investors. This quarter they completely exited their Select Medical position, selling over 2 million shares worth an estimated $32 million.
The exit makes sense once you understand how buyouts work. In March, Select Medical agreed to go private at $16.50 per share in a management-led buyout. Once that deal was announced, the stock's upside got capped—no matter what happens, shareholders get exactly $16.50 when the deal closes mid-2026. Western Standard likely sold because there's no reason to tie up capital in a stock that can't go higher. The company operates critical illness recovery hospitals and rehab clinics.
For regular investors, this illustrates an important principle: When a buyout is announced at a fixed price, the stock becomes a waiting game with limited upside. Your money sits there earning nothing until the deal closes, which is why many investors sell and redeploy elsewhere.
Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Teleflex. The Motley Fool has a disclosure policy.