The FTSE 100 is up 17% over the past year. This is impressive, but across the UK market, there have been some even bigger success stories. For example, I found one UK stock that has risen by a whopping 266% in the same period. Could there still be time to jump on board the rocketship?
Focused on the over 50s
I’m talking about Saga (LSE:SAGA). It’s a UK-based company that exclusively provides products and services for people aged 50 and over. Its core operations are divided into three main segments, namely insurance, travel, and money management.
After doing my research, I don’t believe the rally has been driven by hype. Instead, it’s been fuelled by a series of tangible improvements that suggest a turnaround is gaining real momentum. Although, the stock was trading at very cheap levels a year ago, which does make the percentage rise seem more impressive. But that shouldn’t discount any of the progress the company has made over this period.
The biggest catalyst has been management’s successful restructuring of the business. Saga has transformed itself into a much simpler, lower-risk company by exiting insurance underwriting and partnering with Ageas. That means it’s now focused on higher-margin activities such as travel and insurance broking, while reducing the earnings volatility that previously worried investors.
At the same time, the balance sheet looks far healthier. Last year’s refinancing pushed major debt maturities out to 2031, easing fears of a funding crunch. More recently, the full-year report from April showed net debt had fallen 16% to under £500m, while its leverage ratio improved from 4.4x to 3.7x. Those numbers are moving firmly in the right direction.
The look ahead
Operationally, the business is firing on all cylinders. Travel demand from Saga’s affluent customer base remains exceptionally strong, with the financial report showing ocean cruises enjoying load factors above 90% and customers continuing to spend despite wider economic uncertainty. Insurance broking has also returned to growth in 2025, helping underlying revenue climb 11% and underlying profit before tax increase 19%.
Looking ahead, I think there’s still plenty to like. Management believes it’s ahead of schedule to deliver at least £100m of underlying pre-tax profit by 2030 while continuing to reduce leverage. If those targets are achieved, today’s valuation could still prove attractive despite the spectacular share price recovery. It has a price-to-earnings ratio of 15.73, which is very reasonable and doesn’t indicate it’s overvalued, in my view.
Being reasonable
Of course, there are still risks. For starters, Saga still carries a sizeable debt burden. Although refinancing has bought valuable breathing space, higher interest costs continue to weigh on earnings, and reducing borrowings remains a priority rather than a completed job.
The travel business also remains cyclical. A recession or higher geopolitical tensions could quickly reduce demand for expensive cruises and holidays.
A £2k investment one year back would currently be worth £7,320. Even though I don’t think a fresh investment now will offer the same kind of return, I do believe the share price has legs to keep heading higher. Therefore, it’s a stock I’m considering and think investors could do the same.
Should you invest £5,000 in Saga Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Saga Plc made the list?
Jon Smith does not hold any positions in the companies mentioned.
