On July 18, 2023, Saba Capital Management, L.P. (Trades, Portfolio), a renowned investment firm, added 521 shares of Mfs High Yield Municipal Trust (CMU, Financial) to its portfolio. This article provides an in-depth analysis of this transaction, the guru's profile, and the traded company's basic information.
Details of the Transaction
The transaction took place on July 18, 2023, with Saba Capital Management, L.P. (Trades, Portfolio) adding 521 shares of Mfs High Yield Municipal Trust to its portfolio. The shares were traded at a price of $3.26 each. This addition had no significant impact on the guru's portfolio, representing only 0.21% of the total. Following this transaction, Saba Capital Management, L.P. (Trades, Portfolio) now holds 3,305,572 shares of Mfs High Yield Municipal Trust, accounting for 11.67% of their holdings in the traded stock.
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 of 762 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). The total equity of the firm stands at $5.24 billion, with a strong focus on the Financial Services and Technology sectors.
Overview of the Traded Stock: Mfs High Yield Municipal Trust (CMU, Financial)
Mfs High Yield Municipal Trust (CMU), based in the USA, is a diversified, closed-end management investment company. 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 operates in a single segment and has a market capitalization of $93.190 million. The current stock price stands at $3.29.
Valuation and Performance of the Traded Stock
According to GuruFocus valuation, Mfs High Yield Municipal Trust is significantly undervalued, with a price to GF Value ratio of 0.22. The stock has seen a year-to-date price change ratio of 4.78%. The GF Score of the stock is 51/100, indicating a poor future performance potential.
Financial Health and Profitability of the Traded Stock
The financial health and profitability of Mfs High Yield Municipal Trust are not very promising. The company has a Balance Sheet Rank of 5/10 and a Profitability Rank of 2/10. The company's ROE and ROA stand at -23.19 and -14.12, respectively.
Momentum and Predictability of the Traded Stock
The RSI 5 Day, RSI 9 Day, and RSI 14 Day of the stock are 74.24, 67.64, and 63.68, respectively. The Momentum Index 6 - 1 Month and Momentum Index 12 - 1 Month are -2.75 and -7.29, respectively. The stock's predictability rank is not available due to insufficient data.
Conclusion
In conclusion, Saba Capital Management, L.P. (Trades, Portfolio)'s recent acquisition of additional shares in Mfs High Yield Municipal Trust is a strategic move that further diversifies its portfolio. Despite the traded stock's poor financial health and profitability, the guru's investment could potentially yield significant returns if the stock's valuation improves. However, investors should exercise caution due to the stock's poor future performance potential and negative momentum indices.
