Saga Share Price Forecast July 2021 – Time to Buy Saga Shares?
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Holiday and insurance provider Saga PLC (LSE: SAGA) is in the news lately after it bought back over £170 million of 2024 notes. The over 50s travel and finance specialists struggled during the pandemic but still boasts brand recognition and high customer support. With plans of the company restructuring and rebuilding, investors are once again interested in picking up Saga PLC shares.
Saga Shares – Technical Analysis
According to the financial statement issued by Saga PLC, its market cap is £557.293 million, total assets worth £2.213 billion and total debt of £823.8 million. Its total revenue for 2020 was £337.60 million with a profit margin of -20.08%. SAGA shares are currently valued at £390 at the time of writing, with a downtrend of -0.31%.
Technical information reveals that moving averages such as Exponential Moving Average (10)(409.7), Simple Moving Average (10)(420.5), Exponential Moving Average (20)(410.3), Simple Moving Average (20)(415.7) point towards buying. Most oscillators are neutral in this case, such as Relative Strength Index (14)(42.3), Commodity Channel Index (20)(−120.9), Average Directional Index (14)(15.7) and Williams Percent Range (14)(−97.9).
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Recent Developments
While it’s true that SAGA’s share price has increased up to 65% over the last year. But the last couple of weeks have seen a slump. The lifting of lockdown measures has come into scrutiny after a resurgent Covid-19 crisis, which has increased the risk for travel shares such as SAGA. SAGA share prices are particularly vulnerable to existing travel restrictions. Even though it has made some fresh financial transactions to improve its liquidity, the company still has a large number of debts on its books.
Should You Buy SAGA Shares?
The main reason why investors are not rushing to buy SAGA shares despite its improved outlook is the uncertain environment that the corona crisis has created. However, if its latest figures are to be believed, the company is starting to move on. As per a recent trading update, load factors for the company’s cruises are set at 77% for 2021-2022 and 48% for 2022-2023, both of which are above expectations. Simultaneously the company’s cash burn rate has fallen dramatically.
There is a great deal of uncertainty surrounding the cruise business as it depends on government restrictions. Reports indicate that policymakers will reopen the economy in the next weeks. SAGA’s management has also been shoring up its balance sheet alongside planning for reopening. They have recently put forward plans to raise about £250 million through a fixed-rate guaranteed unsecured bond.
After considering all of the above factors, it can safely be said that SAGA shares are primed for takeoff over the next few months. Even after taking into account all the risks mentioned before, SAGA shares remain attractive for investors at the moment.
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