Burford Capital Share Discussion Threads

[trident5] 25/6/2019 09:46

I'm just commenting on what has now become a clear pattern.

[brexitplus] 25/6/2019 09:41

Trident5

What would you do in their position?

I look at it this way.

1 Burford recycles profits. There is a big demand for their service. The $100 million can be recycled to generate more profits.

2 Burford had no say in the date of the Court decision. It could have been after year end. Other investors have obviously been clamouring for part of the deal. Agreements with the ELEVEN investors (and remember it was oversubscribed) must have been made well in advance to have been announced at the same time as the decision.

[trident5] 25/6/2019 09:38

Burford have an extraordinary habit of selling part-interests in cases between year end and accounts sign off.

Are they selling these interests for the right reasons or to trigger write-ups in their remaining interests to make the year end accounts look better?

[brexitplus] 25/6/2019 09:17

So Liberum target price 2x Cannacord

Someone is wrong!!!

[djderry] 25/6/2019 09:09

Brexit plus,thanks,I haven't heard that quote before,stoxx67,I'm conservative ( with a small 'c',)I hasten to add!

[lomax99] 25/6/2019 08:58

Liberum:Burford has announced good news in the Petersen case. The US Supreme Court has declined to hear Argentina's appeal that the case should not be seen in a US Federal Court. Secondly, Burford has sold a further 10% in the matter for $100m, implying an original valuation of $1bn, 25% up on the level at which the company sold a 4% interest in H2 2018. Burford's current 61.25% entitlement is therefore implied at $613m. Although we do not value individual investments for Burford we view this as a positive since it de-risks our forecasts for 2019. We leave our forecasts and £24.70 TP unchanged and re-iterate BUY.Burford Capital has announced that the US Supreme Court has declined to hear Argentina's and YPF's appeals in the Petersen case.This follows on from the announcement on 10 July 2018 that the US Second Circuit Court of Appeals had affirmed the trial court decision, finding the Petersen claims against Argentina and YPF will be justiciable in the United States Federal Courts. Argentina subsequently appealed this decision.Burford has also announced that it has sold a further 10% of its entitlement in the Petersen matter into the secondary market it has been developing, leaving Burford with 61.25% of its original entitlement. The sale price was $100 million, implying a value of $1 billion for 100% of Burford's original Petersen entitlement. Burford has now generated $236 million in proceeds from Petersen sales and has a residual equity value of $613m.We show below all historic secondary sales and the implied total valuation at those dates. The implied total valuation has increased at each secondary sale. Furthermore, the 10% sale was to 11 institutional investors and was significantly over-subscribed. Including prior purchasers, there are now approximately 40 institutional investors participating in the Petersen secondary market.Burford has been positioning itself as the leading legal services focussed investment bank and delivering this sale to so many institutions, so supporting a healthy secondary market for its investments, shows it is continuing to broaden its service offering and network.The sale of $100m of interest in the case will be directly recorded as revenue for 2019. Our current forecast for revenue in 2019 is $457m, so this constitutes 22% of our annual forecast. We have always stated that Burford is impossible to forecast since the company gives no guidance and is subject to the timetables of different courts and to individually unpredictable legal outcomes. Any particular reporting period could be strong or weak for reasons which no outside observer could predict.As such we do not change our forecasts but note risk to the upside if a number of other investments conclude during 2019.

[lomax99] 25/6/2019 08:55

It was on the 25th July last year.

[stoxx67] 25/6/2019 08:49

i was hoping more around the £40's in a couple of Years DJD, as we know with companies like ASOS, stratospheric share price appreciation can happen, i had expected a little more from Burford, i was in around £9, but other market participants have stalled the rise , for now at least.

last results did surprise a little, great results, little response in SP, i expected £23 back then, and still we languish at £16.

we know this is a growth company and one of the best QUALITY growth companies around, being involved in a relatively new and massive growth sector.

very lazy of me, but when do we get next trading update, end of July ?

[brexitplus] 25/6/2019 08:48

Djderry

Completely agree. A full listing would be very helpful though.

Buffett said

“I could improve your ultimate financial welfare by giving you a ticket with only twenty slots in it so that you had twenty punches - representing all the investments that you got to make in a lifetime. And once you'd punched through the card, you couldn't make any more investments at all.

Under those rules, you'd really think carefully about what you did, and you'd be forced to load up on what you'd really thought about. So you'd do so much better."

Burford is one of those investments.

[djderry] 25/6/2019 08:40

The Petersen matter,as I mentioned last week,is just one,albeit high profile,case that Burford has backed.As the years go by,we will see many others.As an investor,I try not to focus on irrelevant metrics .The share price is one of those.It only becomes relevant if I am about to buy or sell.Then it becomes a big deal.Otherwise ,it makes absolutely no difference,becoming much less important than what I choose to have for breakfast.The key is to look past the noise.And a fund manager who rightly saw the value in Burford who now becomes a forced seller is more 'noise'.(Obviously,a very painful experience for him and his investors.)Of course,the old adage,'never a forced seller be' is the key takeaway.No,the investor carries on ,choosing breakfast wisely,knowing the right choice sets him or her up for the day,knowing he or she has absolutely no control over the squiggles on a graph,or the share price as it's better known.He or she factors the latest news in,in this case the 100 million contribution from a case which has yet to resolve.The cash will then be recycled into further cases,reducing the need to tap the markets until,I estimate,2021.As with the Petersen case,there will be many twists and turns,some good years and some less good ,or perhaps stellar years.Overall,it looks more and more like they can hit the Hardman estimate of $1.98 to $2.03 EPs for 2020 .If the company keeps doing what it's doing and keeps its strict due diligence in place,I'm confident the so will,in time,respond.Predictions are futile but,here goes,the so in March 2021;£31!

[brexitplus] 25/6/2019 08:39

I can’t help thinking that whenever Burford comes out with good news, poor old Portia Patel, living in her multimillion pound Islington townhouse, has had a blazing row with her husband/wife/whatever goes these days, and is in a bad mood. It can’t be anything to do with the Burford.

[mad foetus] 25/6/2019 08:06

Though remember the entire Petersen claim cost $18m. Jaw dropping profitability

[shanklin] 25/6/2019 08:03

Hi Xajorkith

My apologies, having re-read your post, I see you realise BUR still own 61.25%.

My other thought was about you suggesting a realised gain of $100m; obviously that is the incoming cash, but I think the associated profit on this sale is $20m as it will already have had a value (of $80m) on the BUR B/S.

Best wishes, Martin

[galatea99] 25/6/2019 07:19

Canaccord Genuity have yesterday raised their target price but (wait for it) only by 44p, from 1196p to 1240p. I suspect this almost instant (hence, unreflected and lacking any depth of thought) reiteration of their view that Burford is still worth less than the current share price is what may have stopped in its tracks the move-up yesterday. The 44p would seem to correspond simply to a little shopkeeper "cash in, cash out" kind of approach, of simply considering only the effect of the increase in the secondary market value to $1bn. Thus they choose to attribute no value whatsoever to the fact that this decision by the US Supreme Court removes an important element of uncertainty that has been hangong over Burford, in effect derisking to a large degree the outcome of the Petersen case. They seem to attribute no value at all to the fact that institutions were queueing up to get a slice of the action from Burford. They seem to attribute no value at all to the fact that there are now 40 other parties (just as clever and just as competent and just as savvy as CG) who will each have done their own research and decided, in effect, to trust the Burford management to deliver the goods. This is not "analysis" in any sense of the word and shows clearly how nonsensical their approach is and how ridiculous their method of valuation is. No wonder that they are the only ones out of the nine or ten analysts following Burford who are pushing this nonsense. Unfortunately, of course, the market reacts to this tripe and that harms the share price and all of us.

[jonwig] 25/6/2019 06:32

Jock - Woodford selling is a certainty, given the situation with his EIF. The level and pace of his various holding exits is variable, and he could well have sold without passing through a percentage point (that's £35m).

Sadly Burford's share price has a habit of deflating after a sharp rise.

[jockthescot] 24/6/2019 21:22

There hasn’t been an RNS so I’m not sure why people think Woodford has been selling significantly?

[syoun11] 24/6/2019 20:28

Price went up over4% when information released but dropped back. I’m assuming Woodford situation holding investors back

[ali47fish] 24/6/2019 19:20

how come the share price has not risen more-the rns was released at 14.30 what time zone is that? can't be after london market close!

[xajorkith] 24/6/2019 19:16

Sorry Shanklin, thought I had - but thanks for the shout-out anyway ;-)

Will admit to reading it "under the influence", whilst travelling back from York, but still not sure what you mean?

Great news regardless, and reaffirms my reasons for holding long term.

[brexitplus] 24/6/2019 17:52

Steptoes Yard

As he has with Kier, AA, PFG, etc.😂㈳4;😂

[steptoes yard] 24/6/2019 17:39

Minerva will say when

[mad foetus] 24/6/2019 16:54

Well, I bought more just before the close. I think being on AIM limits BUR's eligibility for many investors. I recall seeing that BUR has the highest conviction rate of all stocks held by institutions (i.e. whenever an institution holds it, they hold it in an overweight position).

[stoxx67] 24/6/2019 16:53

by normal standards, he already has !!!

and of course why sell a top quality growth stock, unless you are a forced seller, which we know Woodford has been

[brexitplus] 24/6/2019 16:53

Perhaps waiting for Woodford to sell big.

Also it’s AIM listed and not in many funds mandate.