On July 17, 2023, Saba Capital Management, L.P. (Trades, Portfolio), a renowned investment firm, increased its stake in Mfs High Income Municipal Trust (CXE, Financial), a diversified closed-end management investment company based in the United States. This article provides an in-depth analysis of the transaction, the guru's profile, and the traded company's basic information.
Details of the Transaction
The transaction involved the addition of 579,382 shares to Saba Capital's holdings, representing a 56.43% increase in their position. The shares were acquired at a price of $3.54 each. This transaction had a 0.04% impact on the guru's portfolio, bringing the total shares held in Mfs High Income Municipal Trust to 1,606,031. The traded stock now represents 0.11% of the guru's portfolio, with a holding ratio of 5.09%.
Profile of the Guru: 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 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 investment philosophy is primarily focused on the Financial Services and Technology sectors.
Overview of the Traded Stock: Mfs High Income Municipal Trust (CXE, Financial)
Mfs High Income Municipal Trust operates in the USA, with a single-segment business model. The company's primary objective is to seek high current income exempt from federal income tax, and it achieves this by investing a majority of its net assets in tax-exempt bonds and tax-exempt notes. The company has a market capitalization of $111.285 million and a current stock price of $3.53. According to GuruFocus, the stock is significantly undervalued, with a GF Value of 18.08 and a Price to GF Value ratio of 0.20.
Performance and Ranking of the Traded Stock
The traded stock has a GF Score of 51, indicating a poor future performance potential. Its balance sheet, profitability, and growth ranks are 5, 2, and 0 respectively. The stock's F Score is 5, and it has a Z Score of 0.00. The company's cash to debt ratio is not applicable due to insufficient data. The company operates in the Asset Management industry, with a Return on Equity (ROE) of -23.31% and a Return on Assets (ROA) of -13.97%.
Conclusion
In conclusion, Saba Capital Management, L.P. (Trades, Portfolio)'s recent acquisition of additional shares in Mfs High Income Municipal Trust is a significant move that increases the guru's stake in the company. Despite the stock's poor future performance potential as indicated by its GF Score, the guru's increased investment could be a strategic move based on the company's undervalued status. However, the company's negative ROE and ROA, along with its poor growth rank, suggest that it may face challenges in improving its financial performance. As always, investors are advised to conduct their own comprehensive analysis before making investment decisions.
