The Saga PLC (LON: SAGA) share price has risen 98.2% in the past three months after bottoming in late October. The company’s shares have been rising from 26 October 2022 to date, creating an impressive rally.
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The rally in Saga shares was first triggered by its interim half-year report released on 27 September 2022, which showed that the company’s operations had generated an underlying profit before tax of £14 million for the six months ended 31 July 2022. The underlying profit significantly improved the £2.8 million loss in H1 2021.
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The upbeat half-year results triggered renewed investor interest in Saga shares after the company’s CEO Euan Sutherland attributed the better results to the recovery of its cruise and travel business amid the lifting of most COVID-19-related restrictions.
Unlike many companies, Saga prides itself on exclusively serving clients over 50. Its management is keen to make the firm “the largest and fastest-growing commercial network for older people in the UK.”
Saga provides insurance services and organises holidays and river and ocean cruises while providing personal financial services to over 2.7 million customers. The company’s target clientele is growing as the proportion of people over 50 in the UK and Europe expands.
The company’s management team noted that the UK insurance industry remains challenging, which has been corroborated by other insurance firms such as Aviva that have reproed a surge in motor vehicle claims due to inflation.
Most investors hope Saga’s businesses have performed better in the last half of its financial year, which ends this month. However, we must wait for the company to release its H2 results and full-year report to make informed decisions.
Meanwhile, investors who missed out on the recent rally may be best served to wait for a significant pullback before buying SAGA shares. Given the substantial rally over the past three months, it is reasonable to expect a decent pullback before the rally continues. However, if the current sideways trading persists, we might not get a pullback.
*This is not investment advice.
The Saga share price chart.
The Saga share price has risen 98.15% in the past three months and is up 29.57% in January.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
