The Saga share price is up 30%! Should I buy or sell?

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first_img The high-calibre small-cap stock flying under the City’s radar Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge! Rupert Hargreaves | Thursday, 21st January, 2021 | More on: SAGA I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Since the beginning of 2020, the Saga (LSE: SAGA) share price has jumped by around 30%. But even after this performance, I believe the stock remains severely undervalued. Return to growthI think it’s fair to say 2020 was a terrible year for Saga. The group was just starting to get back on its feet after spending several years dealing with problems at its insurance business. It had also invested hundreds of millions of pounds in new cruise ships. These vessels were supposed to start earning their keep in 2020. Unfortunately, the pandemic put pay to that. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…As a result, the organisation spent much of 2020 in survival mode. However, it wasn’t only the operational problems that weighed on the Saga share price throughout the year. The company also had to deal with management upheaval and a cash call, as well as an activist investor. Put simply, it was a very challenging year for the business. These issues now appear to be behind the company. It has fortified its balance sheet, a new management team started earlier this year, and it looks as if there is an end to the pandemic insight. After raising additional capital towards the end of last year, it seems to me its balance sheet is also much stronger than it was at the beginning of 2020. Saga share price valueAfter the past 12 months’ challenges, I think Saga is a very different business today than it was at the beginning of 2020, and that’s exciting. I believe the pandemic helped the business wipe the slate clean in some ways. It allowed the organisation to restructure and raise new money from investors. And now, I think the company has the foundations in place to develop its brand and grow sales in the years ahead. Of course, the company is likely to face further challenges in the near term. The pandemic is nowhere near over, and it could be some time before consumers are confident enough to return in large enough numbers to make Saga’s cruises profitable.Still, by concentrating on what it does best — offering products to the over-50s market — I think Saga has tremendous potential. It’s one of the most trusted brands in this space, and that reputation alone could be worth hundreds of millions of pounds. From an investment perspective, even after the Saga share price’s recent performance, I believe the stock offers a margin of safety. It’s trading at a forward price-to-earnings (P/E) multiple of just 8. This suggests to me that if the business can return to growth, it could yield large total returns to shareholders.On the other hand, if the company continues to struggle, the stock may not fall much further as plenty of bad news is already baked into the stock price. Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity…You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy.And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline.Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report.But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Image source: Getty Images center_img The Saga share price is up 30%! Should I buy or sell? Enter Your Email Address Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. 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