Burford Capital Share Discussion Threads

[galatea99] 26/7/2019 09:20

A management buy-out backed by private equity would make sense. Chris Bogart and his team and all their staff must be wondering why the hell they need to put up with all this idiocy on AIM and from people like CG and opportunistic shorters. With their record, they would have no difficulty finding willing backers. Better things to do in life than to put up with all this carp..

[trident5] 26/7/2019 09:20

I don't think management are rushing to get off AIM judging by how quickly the conference call ended when that question came up.

Comedic how the CFO lost the line when the big question on realised profits and Peterson's contribution came up.

[clanger66] 26/7/2019 09:09

Probably better in private equity hands. The share price movement recently bears no resemblance to the business. The sooner management wake up and understand that AIM is not the place for Burford, the better.

[discodave4] 26/7/2019 09:08

May buy back here, just seems to be too many unknowns around why such poor share price action after excellent results.

[mad foetus] 26/7/2019 08:57

Amazing that in that font call not one analyst had anything negative to say. The reaction of the share price shows why AIM isn't right for BUR, a FTSE 100 listed company, which is what BUR would be if it moved to the main market, would not swing 20% in 24 hours the way this has done on more than one occasion.

[galatea99] 26/7/2019 08:54

Earnings conference call, both audio and transcript:

[sogoesit] 26/7/2019 08:36

Looks like the market doesn't think this business execution model is sustainable.
For the time being.
Good for risk tolerant contrarians with patience.
My view is probably take 2-3 years to work this one through.
Still long... but under water by £2 to date!!
AIMV

[steeplejack] 26/7/2019 07:37

Thanks for posting that Lomax.I find the management's comments about AIM disingenuous.Burford might provide information worthy of a main listed company but that doesn't recognise that some institutional funds simply won't touch AIM stocks.Anyway,if Burford are to establish a new listing,its more than likely to be on NASDAQ.If you want to raise equity finance,AIM is a pretty lousy choice.Companies like GWPharmaceuticals chose the NASDAQ market to raise cash (ultimately abandoning AIM)with the recognition that NASDAQ better understood how to value biotechs.A similar recognition might come to Burford in time re a fuller understanding of litigation finance companies.A change in the structure of the board and tax complexities might prove secondary to the benefits of a NASDAQ listing.

[lomax99] 26/7/2019 05:22

Transcript of yesterday's earnings call:Https://finance.yahoo.com/news/edited-transcript-bur-l-earnings-232308405.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvLnVrL3NlYXJjaD9xPWJ1cmZvcmQrY2FwaXRhbCZjbGllbnQ9c2FmYXJpJmhsPWVuLWdiJnBybWQ9bm1pdiZzb3VyY2U9bG5tcyZ0Ym09bndzJnNhPVgmdmVkPTJhaFVLRXdpRWxicUczTkhqQWhVSGhsd0tIZHZMQWc0UV9BVW9BWG9FQ0E4UUFRJmJpdz0xMDI0JmJpaD0xMjY0JmRwcj0y&guce_referrer_sig=AQAAAKkeYMILdg6ZshkDQwz5qAsvuS3Q_iiZ9ayueGHzbkKAH22HHIe3eYm5b8B6RF_vfThO0d6iJSSHZExiJeEtYQAZuZAo6rpDzzQsHw8O-6Q8tB1-85ZRKbwwcSaLNlwvgKY1WxyNtqDCpqxl8y8RySTmeaaKs15bUy1FW3qXvN1-

[rar100] 26/7/2019 00:17

It was a cash cow just a short while ago, the good old days of 17

[5chipper] 25/7/2019 22:00

Otherwise why would one invest in a company that is purely creating a larger balance sheet? In the hope of a takeover or breakup of the company?

Surely, at some point Burford will have to become a cash cow for shareholders

[5chipper] 25/7/2019 21:55

I understand CB's comments about being in a high growth phase and wanting to re-invest all profits but that means that Burford is an expanding balance sheet rather than a cash generative company.

I wonder what the mgmt's target size is before they consider substantially increasing the divi.

As I understand it, in order to maintain the investment portfolio size they would need to re-invest about half of any profit which was realised thus being able to return half as a divi.

If they are generating $1b profit in three years then a 5% yield on a $500m divi would equate to a m/cap of approx £8b and a share price of approx £38

[alter ego] 25/7/2019 20:29

Trident, Enron, really? You are either shorting Bur or desperate to get in at a lower price. I’m long Bur. Be open and declare your position too.

[williamcooper104] 25/7/2019 20:23

It's been Burford Bitcoin today

[qruz] 25/7/2019 20:08

Yes tomorrow will probably be another volatile day, either it’s going to surge or tank IMO.

My only thing on that Geordie is why didn’t they do that back in March on results also ? It tanked from then on and was huge volumes on the day.

[rar100] 25/7/2019 19:55

Geordie, thanks for that encouraging info!
I recall similar gyrations on results in the past that's now happened today, so maybe what you are saying here happened before (If it worked then, seems like they will repeat it)but after the gyrations the share price rose to become a higher benchmark.
I hope that when the dust settles, the share price will be a bit more where it should be. Shame this is a traders share now. I cross my fingers for tomorrow...

[geordieshores] 25/7/2019 19:54

Canaccord GenuitySomeone mentioned comments made by broker Canaccord Genuity. Remember Canaccord are a large shareholder of Burford's largest competitor, Manolete. I last posted about this in May on on the London South East website when Canaccord had a 9.2% stake in Manolete.Canaccord are always making negative comments about BUR.In May Manolete shares were 600p. Today they are 483p.

[geordieshores] 25/7/2019 19:40

After hours trades - late buys (BIG ONES!)At 16.35 a UT (uncrossing trade) went through for £3.1m. UT's are always big end-of-day trade that many confuse with buys.However.... at 16.53 a buy went through for 175,771 shares at £15.55 totalling £2.73mAt 16.59 another buy went through for 114,354 shares at £15.43 totalling £1.7m.At 18.27 4 buys went through. 2 x £449k and 2x£682So £6.7m of late trades. Looks like the MM's were artificially lowering the price to fill some big orders.The last 30 trades were all buys (excluding the UT trade).Remember the MM's get a % of the total order value. If client A wants to buy £1.7m worth of shares but only wants to pay £15.43 per share the MM's will drop the price to accommodate. This is how big players can wait for good results to be posted so they are certain the company is doing well and then do a deal with the MM's to lower the price to their required entry point. Lets see what Friday brings....

[galatea99] 25/7/2019 18:32

Bloomberg Law article:

"Burford Capital’s share price fell as much as 9% on Thursday after the litigation finance company reported a record first half for profit and commitments to invest in new lawsuits but a research firm questioned its cash balance.

Burford said its adjusted pretax profit rose 41% from the prior first-half period to $231 million as its total assets rose 37% to $2.3 billion. Its core litigation finance business—investing in standalone disputes and portfolios of lawsuits—allocated $381 million to new investments in the first half of the year. That was up 47% from the prior year period, and driven in large part by a new agreement to finance $130 million of an unnamed company’s portfolio of cases.

The amount Burford actually spent in the period to back new investments grew at a more tepid 8% to $448 million. That figure includes business lines outside of core litigation finance such as asset recovery, post-settlement financing and legal risk management.

Research and fund management firm Shadowfall said in a Tweet it has a short position in Burford due to its belief that “Burford has a pretty strong inverse relationship between its profitability and cash flow.”

Burford CEO Chris Bogart in an interview said that criticism was “a little naïve” when applied to a fast-growing business that relies on investing its capital. He said Burford had used debt and capital fundraising to fuel its growth because of the long-term nature of investing in lawsuits.

“There are two choices: To grow much more slowly, in which case we are generating enough cash” to cover new investments, Bogart said. “And the other is to grow more quickly, in which case we need to rely on the availability of external capital as well. And that has always been our approach.”

Bogart attributed the share-price dip to investors taking profits on the firm’s good news. While the shares have risen to nearly 17 times its 2009 IPO level, they have fallen roughly 5% year-to-date, lagging the broader market.

More broadly, Bogart said Burford’s first-half results showed “considerable” growth in the business driven by “the growing ubiquity of capital” in the legal industry. Burford will celebrate its 10th anniversary in October.

“We have gone from this being an esoteric, remarkable thing to being business as usual,” Bogart said. “It’s that concept of this being business as usual that drives a fair bit of our growth.”

[lawdawg759] 25/7/2019 18:25

JW, I recall CC predicting a fundraising via equity, while BUR (through CB) say in H1 19 that any fundraising in the near future would be via debt raising

[shanklin] 25/7/2019 18:11

IIRC BUR said today they might raise debt but not had no plan to raise equity. Can't see how BUR increasing debt would help Canaccord's ridiculous analysis.

[trident5] 25/7/2019 18:03

Galatea
So far, AFAIK no-one has found fraud at Quindell. But near the end there was a lot of talk about finding a solution by selling shares on the US market.

Enron - my response to you saying the London market was pathetic.

[jonwig] 25/7/2019 17:59

Canaccord have set themselves a test of their credibility: further fundraising in H2 - ie. by end-2019.

On the evidence, they might have a point, as the retail bonds BUR2, 3 and 4 were issued in 2016, 17 and 18. If it does happen, they might be tempted to see this as vindication, rather than the simpler explanation that demand for their services is outpacing their ability to fund through reinvested profits.