Saga offers a range of products and services primarily tailored for the over 50s. The group came to the market in 2014 and investors will know that the share price has struggled to make much headway from its initial offer price. However, recent announcements have given hope that the upward trend in the share price since February may be sustainable and benefit long-term shareholders. Indeed in an update in June, the company reassured investors that it remains on track to reach its target for the year and in addition, is making good progress against its strategic priorities.

Management are keen to move the company away from its main insurance and holiday services to other areas, such as taking commission from third parties who will use the brand name.

In late April the residual private equity holding was placed in the market at 195 pence and takes away something from the share that was potentially acting as a drag. A further positive for us was that a significant chunk was bought by the non-executive chairman and that on the back of an improvement in cash flow guidance for dividend pay-outs has been increased.

Although we are gearing this recommendation for income seekers, the potential for the group to continue to benefit from the increasingly important over 50’s market and its brand name will hopefully lead to some steady long-term growth. We subsequently recommend Saga as a ‘buy’ for medium risk investors.