Burford Capital Share Discussion Threads

[f15jcm] 25/7/2019 09:46

"management to date have been soberly cautious - this is a notable change in tone" yes, I picked up on that and have added.

[alphabeta4] 25/7/2019 09:44

Not so trident - BUR have regularly stated that they keep cases well below value seen on realisation so there would have been a gain on the Tenvier sale.

[trident5] 25/7/2019 09:36

Good point Winsome - I'd overlooked that; but that was a disposal of the final interest in that case - therefore there were no unrealised gains to add to income.

[edmondj] 25/7/2019 09:27

They are majoring on rubbishing the ROCI approach in the critical broker note although I thought the 'rogue' analyst also questioned Burford's including fair value movements (in its legal investments, and according to Burford's own judgment) in published profits, thereby enhancing the great leaps forward.

Note 7, when referring to investment income, cites net realised gains up from $124.5 million to $139.5 million, while fair value movements have contributed $152.9 million, up from $70.5 million. Meanwhile the cash flow statement cites proceeds from investments down from $342.6 million to $315.1 million.

Obviously management has indulged at least one previous report, dismissing why anyone should not take a 'mark to market' approach.

[winsome] 25/7/2019 09:26

trident, if you say that then you have to also strip the Tenvier $100m from previous interims results, so it wouldn't be negative at all. But what's the point on doing that? I don't see these as one-offs. Its all cash to me.

[trident5] 25/7/2019 09:15

On the face of it the results look stellar.

But it's good job they got that $100m Peterson sale to their secondary market away a few days before the end of the reporting period, otherwise the results v the comparative period would be a big negative.

[alter ego] 25/7/2019 09:01

Interim report on Burford website at


provides a wealth of information and commentary. I particularly note on page 13, the rebuttable of Cannacord's criticism about calculating ROCI on partially concluded investments which are described as "derisable".

Well worth a read.

[williamcooper104] 25/7/2019 08:59

Yes - and management to date have been soberly cautious - this is a notable change in tone

[williamcooper104] 25/7/2019 08:55

With my tax free little spread bet top up today's a great day to sit in the sun enjoying Burford Special Brew

[lomax99] 25/7/2019 08:47

Arden:Market concerns during the period means that the share price has not moved ahead despite positive developments in the Teinver and Petersen cases. At current levels the shares trade at 2.9x P/NAV (before any changes to forecasts) which doesn't reflect the forecasted 23% ROE that is scaling at a rapid rate. We believe a "steady state" ROE would be far in excess of this, given the deflationary effect the scale up in the Group's equity base as it grows will have. Our target price is 2,300p, 4.0x our existing P/NAV for CY19.No change to forecasts at this time, though our current FY19 PBT forecast of $355.8m appears very well supported by the $231.5m in H1.

[riverman77] 25/7/2019 08:46

Muted market reaction, but for those who don't already own this has to be a great opportunity to get in at a very attractive level IMO. These should be well above £20, and wouldn't be excessively valued at £25 - if I didn't already have such a big position I'd be adding more.

[alphabeta4] 25/7/2019 08:46

Liberum say:

Burford's H1 results have shown continued high growth in
commitments and record returns, with further positive
development of the business model such as a $130m
corporate portfolio. As we have discussed in previous
research Burford is impossible to forecast short-term, but
those commitments make our expectations for 2019
deployments look very achievable. We leave our forecasts
unchanged. The current share price expects returns to fall
but this has been far from the case. Our TP of £26 is
derived using a DCF and only 50% ROIC from 2022. Our TP
implies 56% upside, BUY.

The company has earned a 98% ROIC to date on completed
investments, 60% if you exclude partial realisations, but the share price
now discounts an immediate fall in future returns to 37%. Returns have
been 46% (pre H1) even if you randomly decided to exclude the
Petersen and Teinver successes.
This is despite the fact that [1] the mix of its business has become more
positively skewed to complex cases where returns are higher now and
should remain higher in future and [2] the sovereign wealth fund deal
levers Burford’s return by 1.8x. Working in the other direction is capital
allocation to lower ROIC but faster cash-cycling business lines.

[glaws2] 25/7/2019 08:44

Both Arden and Liberum have commented very positively but left their forecasts unchanged - target prices of £23 and £26 respectively.

[lomax99] 25/7/2019 08:44

Liberum:Burford's H1 results have shown continued high growth in commitments and record returns, with further positive development of the business model such as a $130m corporate portfolio. As we have discussed in previous research Burford is impossible to forecast short-term, but those commitments make our expectations for 2019 deployments look very achievable. We leave our forecasts unchanged. The current share price expects returns to fall but this has been far from the case. Our TP of £26 is derived using a DCF and only 50% ROIC from 2022. Our TP implies 56% upside, BUY

[galatea99] 25/7/2019 08:41

The "market" is probably waiting for broker reaction to these results.
That's what we often see happening, isn't it?
There is often more the herd instinct than actually doing one's own research.
Easier for them, I suppose, they may look for what they see as safety in numbers.
Lazy, rather, but hey, it's other people's money they are handling,
they get their fees in any case.

[jonwig] 25/7/2019 08:40

Arden and Liberum have published positive notes this morning. If anyone can access, a summary would be welcome.

[melody9999] 25/7/2019 08:38

agree pay - initial entry position for me this am. should smash fy current estimates which will mean broker upgrades to follow

[payno1989] 25/7/2019 08:24

Wow these are looking very cheap right now!

[mr bennn] 25/7/2019 08:23

Greedy maybe, but with such outstanding results again i was hoping for an even bigger rise.

[winsome] 25/7/2019 08:13

As Buffett once said, the stock market is designed to transfer money from the active to the patient

[winsome] 25/7/2019 08:00

WELL, WHAT'S NOT TO LIKE?

And I agree with above comments - strong hint at US listing in next few years.

[lawdawg759] 25/7/2019 07:53

I could see the American media getting ahold of the BUR story and the share price going irrationally through the roof. A bit of volatility upfront but maybe a good move in the long term

[galatea99] 25/7/2019 07:49

"Thus, it is unlikely that we will pursue a Main
Market listing in the near term as we do not see
the benefits exceeding the costs and
disadvantages. If we were to consider any listing
change, it is more likely that we would pursue a
dual listing by adding a US exchange, either
NASDAQ or the New York Stock Exchange, but as
it is not something about which the Board has
made any decision, there can be no assurance
that we would pursue such a listing and in any
event it is not something we would envision
completing in 2019."

[gettingrichslow] 25/7/2019 07:47

This is shaping up to be a very interesting day - what with the BUR share price (fireworks?), BoJo in No 10, hottest ever UK temperature??