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TAKE PROFITS Saga (SAGA)

Close Saga (SAGA) at market (221p)

Saga has been one of the stand-out performers across our list of FTSE Investor open positions, more than doubling in value since we bought the shares last year. The stock has been driven by strong momentum, with the price now sitting close to its 52-week highs after a steady run of outperformance. We highlighted the stock when sentiment was low and the valuation looked washed out, and that decision has delivered an excellent return. With the recovery story now more widely recognised by the market, the risk reward profile is not as favourable as it once was which makes this a natural point to crystalise the gains.

The financial picture today still highlights the challenges Saga faces. The company remains loss making on a reported basis, margins are weak and returns on equity and capital are deep in negative territory. The balance sheet also carries significant debt which leaves little room for setbacks. While cash generation has improved, the shares are already reflecting a large part of the recovery narrative. We will look to take profits at current prices with a view to potentially re-entering if prices pullback and the fundamental picture continues to improve.

Profit = +109.4%

SAGA Daily Candle Chart