Saba Capital Management, L.P. Increases Stake in DWS Strategic Municipal Income Trust
Saba Capital Management, L.P., a renowned investment firm, has recently expanded its portfolio by acquiring additional shares in DWS Strategic Municipal Income Trust (NYSE:KSM). This article provides an in-depth analysis of the transaction, the profiles of the guru and the traded company, and the potential implications for value investors.
Details of the Transaction
The transaction took place on August 17, 2023, with Saba Capital Management, L.P. adding 210 shares of DWS Strategic Municipal Income Trust to its portfolio. The shares were purchased at a price of $8.2 each, bringing the firm's total holdings in KSM to 1,156,462 shares. This acquisition represents 0.25% of the guru's portfolio and 10.43% of the traded company's total shares.
Profile of the Guru: Saba Capital Management, L.P.
Saba Capital Management, L.P., located at 405 Lexington Avenue, New York, NY 10174, is a prominent investment firm with a diverse portfolio. The firm's top holdings include Templeton Global Income Fund(NYSE:GIM), BlackRock Capital Allocation Trust(NYSE:BCAT), BlackRock Health Sciences Trust II(NYSE:BMEZ), BlackRock Innovation & Growth Tr(NYSE:BIGZ), and BlackRock ESG Capital Allocation Trust(NYSE:ECAT). With an equity of $3.84 billion, the firm primarily invests in the Financial Services and Technology sectors.
Overview of the Traded Stock: DWS Strategic Municipal Income Trust
DWS Strategic Municipal Income Trust (NYSE:KSM), based in the USA, is a closed-end, diversified management investment company. The company's primary objective is to provide a high level of current income exempt from federal income tax, achieved by investing in a portfolio of tax-exempt municipal securities. The company's market capitalization stands at $89.467 million, with a current stock price of $8.07. However, the company's PE percentage is currently not applicable, indicating a loss.
Analysis of the Stock's Performance
The GF Score of KSM is 39/100, suggesting a poor future performance potential. The company's Financial Strength is ranked 5/10, while its Profitability Rank is 2/10. The Growth Rank and GF Value Rank are currently not applicable due to insufficient data. The company's Momentum Rank is 5/10, indicating a moderate momentum in the stock's price.
Stock's Financial Health and Industry Position
KSM operates in the Asset Management industry. The company's ROE and ROA are -6.12 and -3.57, respectively, placing it at ranks 1077 and 1028. The company's cash to debt ratio is currently not applicable, indicating a lack of sufficient data. The company's gross margin growth, operating margin growth, and earning growth over the past three years are also not available.
Stock's Momentum and Predictability
The RSI 5 Day, RSI 9 Day, and RSI 14 Day of KSM are 8.01, 16.72, and 24.57, respectively. The stock's momentum index 6 - 1 month is 1.92, while the momentum index 12 - 1 month is -9.68. The predictability rank of the stock is currently not available due to insufficient data.
Conclusion
In conclusion, Saba Capital Management, L.P.'s recent acquisition of additional shares in DWS Strategic Municipal Income Trust is a significant move that expands its portfolio. However, the traded company's performance metrics suggest a poor future performance potential. Value investors should carefully consider these factors before making investment decisions. As always, it is crucial to conduct thorough research and consider various factors before investing in any stock.
This article first appeared on GuruFocus.
