Introduction to the Transaction
On September 27, 2023, Saba Capital Management, L.P. (Trades, Portfolio), a New York-based investment firm, added 442,590 shares of BlackRock ESG Capital Allocation Trust (ECAT, Financial) to its portfolio. The shares were acquired at a price of $14.6 each, bringing the firm's total holdings in ECAT to 15,004,931 shares. This transaction had a 0.17% impact on the firm's portfolio and increased its position in ECAT to 5.7%. Notably, Saba Capital Management now holds 14.66% of ECAT's total shares.
Profile of the Guru
Saba Capital Management, L.P. (Trades, Portfolio), located at 405 Lexington Avenue, New York, NY 10174, is an investment firm with a diverse portfolio of 624 stocks. 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). With an equity of $3.84 billion, the firm primarily invests in the Financial Services and Technology sectors.
Overview of the Traded Stock
BlackRock ESG Capital Allocation Trust (ECAT, Financial) is a non-diversified, closed-end management investment company based in the USA. The Trust aims to provide total return and income through a combination of current income, current gains, and long-term capital appreciation. It operates as a single segment entity with a market capitalization of $1.51 billion. As of September 28, 2023, the stock's price stands at $14.71. However, due to insufficient data, the GF Valuation and GF Value of the stock cannot be evaluated.
Analysis of the Stock's Performance
Since its Initial Public Offering (IPO), ECAT has experienced a price change of -26.45%. However, the stock has gained 0.75% since the transaction and has a Year-to-Date (YTD) price change ratio of 8.56%. According to the GF-Score, ECAT has a score of 20/100, indicating poor future performance potential. The stock's Financial Strength, Profitability Rank, Growth Rank, GF Value Rank, and Momentum Rank are 8/10, 0/10, 0/10, 0/10, and 0/10 respectively.
Examination of the Stock's Financial Health
ECAT's financial health is reflected in its Altman Z score of 0.00 and a cash to debt rank of 1. The company operates in the Asset Management industry and has a Return on Equity (ROE) of 13.55% and a Return on Assets (ROA) of 12.30%. However, due to insufficient data, the gross margin growth, operating margin growth, revenue growth over 3 years, EBITDA growth over 3 years, and earning growth over 3 years cannot be evaluated.
Evaluation of the Stock's Predictability and Momentum
ECAT's predictability rank is not available. The stock's Relative Strength Index (RSI) over 5 days, 9 days, and 14 days are 17.26, 20.99, and 25.80 respectively. The momentum index over 6 - 1 month and 12 - 1 month are 3.40 and 17.74 respectively. The RSI 14 day rank and momentum index 6 - 1 month rank are 310 and 575 respectively.
Conclusion
In conclusion, Saba Capital Management, L.P. (Trades, Portfolio)'s recent acquisition of ECAT shares signifies its confidence in the stock's potential. Despite the stock's poor GF-Score and lack of data for several financial indicators, the firm's increased stake could indicate a positive outlook for ECAT. However, value investors should conduct thorough research and consider all relevant factors before making investment decisions.
