While it's perfectly possible there could be a sudden spike from positive developments in YPF, the fact is this could happen to many of the shares I hold, eg through a takeover at a big premium or big contract win. Therefore I just don't think this is reason enough in itself to continue to hold. I've been out for a while and can't find enough in last results to tempt me back. |
if every one is waiting just for a spike - we have a problem huston
simple day in day out business should be giving all the share price support deserved on lets say 2 years averaged eg 8 Qs post covid period - as a fair measure for the discussion - what is in for the shareholders for real /executed and delivered/. there is enough historical backlog to get the feeling of what is going on... as a business ability to deliver to the shareholders. business has a needed critical mass to see the real shine and stakeholders cash distribution model.
without even trying to go to this and that specific case and or timing guessing etc |
From Seb ?Known Calendar for the Next 3 Months for the Republic of Argentina in international courts: Aug 12: 2019 GDP-Linked Warrants -> Aurelius files the first brief in the appeal of the ruling favorable to the Republic of Argentina. Aug 13: YPF Case -> Argentina submits defenses against request to declare YPF and BCRA as Alter Egos. Aug 13: YPF Case -> Banco Nación files a brief to avoid disclosing information about its Alter Ego status. Aug 19: 2024 PBA Default Debt Case -> Initial conference with the judge. Aug 23: YPF Case -> The oil and gas company presents a defense in the Court of Appeals to avoid being reinstated in the case. Sep 5: 2021 PBA Default Debt Case -> Conference to finalize the agreement and pay the judgment. Sep 6: YPF Case -> Final arguments from all parties in the appeal of the 2023 ruling. Sep 17: 2023 GDP-Linked Warrants -> Aurelius files a brief in response to Argentina's request to dismiss the new lawsuit. |
I've been back and forwards through figures but in reality they are not that exciting..Portfolio continues to steadily grow at 6%..8Q argument used by Chris on commitments and deployments benefits by weak 3Q 22 for commitments. Deployments low in Q1, Q3, Q4 23 and Q1 24 bringing the average down so easier to beat..Realisations are lagging as expected so H2 should benefit.The forward PE for FY25, FY 26 is not that different from today's. .It's all about YPF cash hopefully getting a significant pot to drive the portfolio or ideally give us a big dividend. .I suspect as above many are waiting for the spike that will come with a positive conclusion. |
Out of interest, I had set an DP of £9 to buy back; a equally challenging decision point in rebalancing strategies, made all the more difficult if something moves in line with the market during big shifts. (What to sell, if anything?) I don't rebalance 'automatically' (rebasing based on initial buy-in price, current share price and percentage of portfolio), but use the triggers to make a decision regarding what to do based on current information. It's more fun, but means I need to keep my portfolio relatively small and highly focused. Meanwhile, I too expect the possibility of an immediate and sharp uplift in BUR at any time.... and share the frustration of all the long term holders here on the sequential delays inherent in the US legal system! |
A favourable decision later today from Preska would surely see this return in an instant to the post Muddy Waters highs. Maybe slightly wishful thinking but quite possible. |
I guess everyone has to contend with "the share price could fly at any time, due to sudden news on YPF or other cases".. so trimming is risky .. i wish i had too |
Your post did not strike me as boastful. I wish I had done the same as you (and bought back now). Oh well. |
Agreed reddirish. three black crows is less impressive than the large number of his posts. |
Sorry if my post came across as boastful, it wasn't meant to. Trimming is part of my portfolio management, and Burford's earlier rise had triggered a decision point. In my post, I mentioned a couple of the points that I think will help move the share price closer to where I 'believe' (the word you use) the company is worth. If I didn't believe it was very likely to get there, I would not continue to hold, and would have have sold everything at that decision point rather than trimming. As an aside, your 'donkey' jibe was a bit unnecessary: this is normally quite a well mannered board, and it would be a shame to see it degrade like some of the others! |
Well, here we go, someone who doesn't believe in Burford, likes to boast about the trimming. why don't you ride your donkey elsewhere. |
I did trim back a bit (25% of holding at £12.50) and like you am looking at my decision: it has always been obvious that Argentina will continue to drag this on, and I could have trimmed more. However, what was not clear then - and what is increasingly clear and is now reflected in the sp- is that cash generation is a lot lower than expected, as are commitments. The continued spin regarding the meaningless total portfolio leaves a bit of a bad taste too. But still I hold for now because even with all that, I still think it is worth over £20 - but only when some reliable cash generation from Argentina begins to flow. How long might that be....? Too long a wait and we miss out on a lot of other great opportunities.... |
I’ve lost a bit of patience with myself for not trimming earlier when it was clear the YPF saga would drag on. Live and learn.
I know that BUR do not manage quarters but can’t help noticing the Sundance/Congo deal was announced on July 1st with cash due end September… so not particularly concerned about Q3 this year. |
I lost patience with Burford a long time ago. I know the business is lumpy and Covid added further delays, but it's been an eternity now and still no sign of any meaningful cash generation. |
Winning is great, now let's see some cold hard cash.... |
Quote of the day,from Jonathan Molot,'I love winning'. |
For me, the positive in today’s results is that net realised gains are up from $94M to $128M - I think of this as the gross margin - while total operating expenses are half that and the cash element will be lower still. So cash positive. $245M cash receipts is original cash deployment plus the gain coming in, in simple terms.
There is little fair value adjustment. Always welcome as the unrealised gain/loss can throw the accounting optics. I was expecting some movement up as interest rates move down in the US.
Downside is that the balance sheet cash out to work in actual deployments (the number to use in ROIC/IRR) is relatively unchanged - annd much lower than the headline portfolio $7bn number - and debt is bigger that the deployed balance sheet position.
Needs a big win to fix the cash position. |
Argentina is waiting for two critical rulings, both expected in coming days.1. Decision by the UK Supreme Court on GDP Warrants. If PTA is rejected, creditors will execute a Letter of Credit for EUR 313 million, and Argentina will have to pay EUR 1.33 billion plus interest.2. Decision by Judge Preska regarding the transfer of YPF shares held by the State to YPF judgment creditors. |
From SebI need to clarify one thing regarding the first point. In the United Kingdom, in order to appeal a ruling in the Supreme Court, it is necessary to file a request for appeal (PTA) in the Court of Appeal and/or in the Supreme Court itself. Argentina already filed a PTA in the Court of Appeal and it was denied on 21/6. After it was rejected, it filed a PTA in the Supreme Court. It is unlikely that the response will be different. The decision will be in the next few days. |
 “Fair valuing” of assets means different things to different people, and it has always existed in some form. Eg writing down of bad debts, depreciation, amortisation etc. IFRS is standard in over 130 countries but differ slightly in each. For litigation assets it was first accepted in an Australian court for IFRS 25 years ago. It is not mandatory for IFRS auditors, but is increasingly fully accepted.
BUR wanted it as it enhances their results which on multi year litigation cases like YPF were inevitably very misleading. BUR naturally required fair valuing to be first approved in detail by the SEC, as they knew they would soon have to adopt GAAP.
Negotiations with the SEC took a long time, as FV was viewed with understandable suspicion by US and Canadian investors. Their GAAP was rigidly regulatory and less of an “art”. Unsuitable for the then emerging litigation finance companies, previously unknown.
There has never been “cash accounting” under either IFRS or GAAP. Debtors, creditors and depreciation etc have always been recognised. |
Not sure how " “fair valuing” of assets was never accepted practice under US GAAP or the global IFRS " squares with the fact that BUR first started fair valuing their assets precisely because it was mandated by IFRS. Management wanted to stick with cash accounting (which is how they have always looked at and managed the business) and it was their auditors who insisted on fair value. |
Partially agreed tradertrev. The lengthy negotiations some years ago between Burford Capital and the Stock Exchange Commission (SEC) were about whether, and to what extent, “fair valuing” of assets should be allowed by the SEC under US GAAP. To do so might destabilise the US share market, possibly Canada although few others.
Burford, mindful of the then recent Muddy Waters attack on their figures, understandably wanted to demonstrate “best practice”. The SEC eventually agreed a compromise to GAAP, and the differences with IFRS can be clicked on below.
Before then “fair valuing” of assets was never accepted practice under US GAAP or the global IFRS. The juducial acceptance of fair valuing started in Australia 17 years ago.
Further datails from:
hxxps://rsmus.com/content/dam/rsm/insights/financial-reporting/1pdf/us-gaap-to-ifrs-comparisons-20231215.inline.pdf |
I doubt - after all the back-and-forth with the SEC - that there will be any change to the accounting practices and principles. |
Burford US shareholders now consist, much later than anticipated, of over 50% of shareholders outside the US. So, effective 1 Jan 25 BUR will become a US domestic issuer. What does this mean for UK shareholders? Quite a lot:
1/ Audited accounts calculated according to the globally more common International Financial Reporting Standards (IFRS) will no longer be produced. Audited accounts will continue, but only according the US Generally Accepted Accounting Principals (GAAP).
2/ That will mean quarterly results, already produced with three quarters unaudited, are now compulsory. Slightly less fair valuing of assets, and less emphasis on accruals and more on cash, both either way.
3/ It may also mean following standard US practices for example: Much reduced dividends, the ending of Trading Updates, and the imposition of US 15% (variable) dividend withholding tax. Probably BUR’s place of incorporation changing from Guernsey to the US, and a greater effect on the sterling share price caused by US events and the dollar exchange rate.
BUR have long believed that the overall effect will be an increase in the share price. About time, some may think. |
Up against 44m revenue from Q2 23 so should smash Q2. H1 23 425m so will need 381m to bring in line that's harder. H2 23 strong with new reporting, yes we need good news..Thursday will tell at 12:00 |
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