On July 18, 2023, Saba Capital Management, L.P. (Trades, Portfolio), a renowned investment firm, added 1,525,427 shares of ClearBridge MLP & Midstream Fund Inc. (CEM, Financial) to its portfolio. This article provides an in-depth analysis of the transaction, the guru's profile, and the traded stock's performance and valuation.
Profile: Saba Capital Management, L.P. (Trades, Portfolio)
Saba Capital Management, L.P. (Trades, Portfolio), located at 405 Lexington Avenue, New York, NY 10174, is a prominent investment firm with a diverse portfolio. The firm's investment philosophy is centered on identifying undervalued assets and capitalizing on market inefficiencies. As of the transaction date, the firm held 762 stocks, with a total equity of $5.24 billion. The firm's top holdings include Templeton Global Income Fund (GIM, Financial), BlackRock Capital Allocation Trust (BCAT, Financial), BlackRock Health Sciences Trust II (BMEZ, Financial), BlackRock Innovation & Growth Tr (BIGZ, Financial), and BlackRock ESG Capital Allocation Trust (ECAT, Financial). The firm's portfolio is heavily concentrated in the Financial Services and Technology sectors.
Transaction Details
The transaction took place on July 18, 2023, with Saba Capital Management, L.P. (Trades, Portfolio) adding 65,397 shares of ClearBridge MLP & Midstream Fund Inc. (CEM, Financial) at a price of $35.1 per share. This transaction increased the firm's holdings in CEM by 4.48%, bringing the total shares held to 1,525,427. The transaction had a 0.04% impact on the guru's portfolio and increased their position in the traded stock to 11.45%.
Traded Stock: ClearBridge MLP & Midstream Fund Inc.
ClearBridge MLP & Midstream Fund Inc. (CEM, Financial), a U.S.-based company, was listed on June 25, 2010. The company operates as a non-diversified, closed-end management investment company, primarily investing in energy master limited partnerships (MLPs) and energy midstream entities. The company operates as a single segment and has a market capitalization of $474.199 million. As of the transaction date, the stock was trading at $35.6, with a PE ratio of 2.62. However, due to insufficient data, the GF Valuation could not be evaluated.
Stock Performance and Valuation
Since its IPO, CEM has experienced a price change of -64.4%. However, year-to-date, the stock has gained 10.18%. The stock's GF Score stands at 36/100, indicating poor future performance potential. The stock's balance sheet, profitability, and growth ranks are 3/10, 1/10, and 0/10, respectively, while its momentum rank is 8/10.
Stock Financial Health and Industry Position
CEM's financial health is reflected in its F Score of 4 and a Z Score of 0.00, indicating potential financial distress. The company's ROE and ROA stand at 35.02% and 24.40%, respectively, with ranks of 75 and 65. However, due to insufficient data, the company's gross margin growth, operating margin growth, and 3-year revenue, EBITDA, and earning growth could not be evaluated. The company operates in the Asset Management industry.
Stock Momentum and Predictability
CEM's momentum is reflected in its RSI 5-day, 9-day, and 14-day scores of 64.59, 63.06, and 61.44, respectively. The stock's 6 - 1 month and 12 - 1 month momentum indices stand at -2.66 and 11.85, respectively. However, the stock's predictability could not be ranked due to insufficient data.
Conclusion
In conclusion, Saba Capital Management, L.P. (Trades, Portfolio)'s acquisition of a significant stake in ClearBridge MLP & Midstream Fund Inc. is a noteworthy transaction. Despite the stock's poor performance since its IPO and low GF Score, the guru's investment could indicate potential undervalued assets within the company. However, the stock's financial health and momentum suggest caution for value investors. As always, investors are advised to conduct their own comprehensive analysis before making investment decisions.
