Saba Capital Management, L.P. Boosts Stake in BlackRock ESG Capital Allocation Trust

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Saba Capital Management, L.P., a renowned investment firm, has recently increased its stake in BlackRock ESG Capital Allocation Trust (NYSE:ECAT). The transaction, which took place on September 21, 2023, saw the firm add 14,487,369 shares to its portfolio. This article provides an in-depth analysis of the transaction, the profiles of both the firm and the traded company, and the potential implications for value investors.

The transaction was executed on September 21, 2023, with Saba Capital Management, L.P. (TradesPortfolio) adding 17,791 shares to its holdings. The shares were traded at a price of $14.86 each, bringing the firm’s total holdings in ECAT to 14,487,369 shares. This transaction had a 0.01% impact on the firm’s portfolio and increased its position in ECAT to 5.61%. The firm now holds 14.15% of ECAT’s total shares.

Saba Capital Management, L.P. (TradesPortfolio), located at 405 Lexington Avenue, New York, NY 10174, is a well-established investment firm. The firm manages a diverse portfolio of 624 stocks, with a total equity of $3.84 billion. Its 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). The firm’s investments are primarily concentrated in the Financial Services and Technology sectors.

Overview of BlackRock ESG Capital Allocation Trust

BlackRock ESG Capital Allocation Trust (NYSE:ECAT) is a non-diversified, closed-end management investment company based in the USA. The company’s primary objective is to provide total return and income through a combination of current income, current gains, and long-term capital appreciation. As of September 23, 2023, the company has a market capitalization of $1.51 billion and its stock is trading at $14.77 per share. However, due to insufficient data, the company’s GF Value cannot be evaluated.

Analysis of the Stock’s Financial Health

ECAT’s financial health is evaluated based on several metrics. The company’s Financial Strength is ranked 8/10, indicating a strong balance sheet. However, its Profitability Rank is relatively low at 2/10, and its Growth Rank is currently not applicable due to insufficient data. The company’s Return on Equity (ROE) and Return on Assets (ROA) are 13.55% and 12.30% respectively, ranking 270th and 205th in the industry.

Stock’s Performance Metrics

ECAT’s performance metrics reveal a mixed picture. The stock’s Momentum Rank is currently not applicable due to insufficient data. The stock’s 5-day, 9-day, and 14-day Relative Strength Index (RSI) are 7.60, 16.50, and 24.09 respectively. The stock’s momentum index for 6 – 1 month and 12 – 1 month are 3.51 and 12.58 respectively.

Conclusion

In conclusion, Saba Capital Management, L.P. (TradesPortfolio)’s recent acquisition of ECAT shares represents a significant addition to its portfolio. While ECAT’s financial health and performance metrics present a mixed picture, the firm’s increased stake in the company indicates a strong belief in its potential. As always, value investors should conduct their own research and consider multiple factors before making investment decisions.

Image by: Saba Capital

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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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