Saba Capital Management, L.P. (Trades, Portfolio), a renowned investment firm, has recently expanded its portfolio by acquiring additional shares in ClearBridge MLP & Midstream Fund Inc. (CEM, Financial). This article provides an in-depth analysis of the transaction, the profiles of the guru and the traded company, and the potential implications of this investment.
Details of the Transaction
On July 31, 2023, Saba Capital Management, L.P. (Trades, Portfolio) added 2,668 shares of ClearBridge MLP & Midstream Fund Inc. to its portfolio. The shares were purchased at a price of $37.19 each. Following this transaction, the firm now holds a total of 1,644,460 shares in the company, representing 1.17% of its portfolio and 12.37% of ClearBridge's total shares. Despite the relatively small change of 0.16%, the transaction has a significant impact on the firm's holdings in the traded stock.
Profile of the Guru: Saba Capital Management, L.P. (Trades, Portfolio)
Saba Capital Management, L.P. (Trades, Portfolio), based in New York, is a leading investment firm with a diverse portfolio. The firm currently holds 762 stocks, with a total equity of $5.24 billion. Its 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 investments are primarily concentrated in the Financial Services and Technology sectors.
Overview of the Traded Stock: ClearBridge MLP & Midstream Fund Inc.
ClearBridge MLP & Midstream Fund Inc., 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. With a market capitalization of $484.44 million, the company's current stock price stands at $36.44. However, the company's PE percentage is currently not applicable, indicating that it is operating at a loss.
Analysis of the Traded Stock's Performance and Valuation
Since its IPO, ClearBridge's stock has declined by 63.56%, but it has gained 12.78% year-to-date. The stock's GF Score is 36/100, suggesting poor future performance potential. The company's Financial Strength and Profitability Rank are 4/10 and 1/10, respectively, indicating weak balance sheet and profitability. The company's Growth Rank and GF Value Rank are both not applicable due to insufficient data. However, its Momentum Rank is 8/10, suggesting strong market momentum.
Evaluation of the Traded Stock's Future Performance Potential
ClearBridge's Piotroski F-Score is 4, indicating average financial health. The company's Altman Z score is not applicable, and its cash to debt ratio is also not available. The company operates in the Asset Management industry, and its interest coverage is not applicable, suggesting that it may have difficulty meeting its interest obligations.
Analysis of the Traded Stock's Financial Health
ClearBridge's ROE and ROA are -8.16 and -5.61, respectively, indicating poor profitability. The company's gross margin growth and operating margin growth are both not applicable. The company's 3-year revenue, EBITDA, and earning growth are also not available, suggesting that it may have experienced stagnant growth in recent years.
Assessment of the Traded Stock's Market Momentum
ClearBridge's RSI 5 Day, RSI 9 Day, and RSI 14 Day are 46.20, 54.87, and 57.86, respectively, indicating neutral market momentum. The company's Momentum Index 6 - 1 Month and Momentum Index 12 - 1 Month are -4.36 and 4.33, respectively, suggesting mixed market momentum.
In conclusion, Saba Capital Management, L.P. (Trades, Portfolio)'s recent acquisition of ClearBridge MLP & Midstream Fund Inc. shares represents a strategic move to diversify its portfolio. However, given ClearBridge's current financial performance and market valuation, the potential return on this investment remains uncertain.
