Burford Capital Share Discussion Threads

[lionheart69uk1] 09/8/2019 11:18

duplicated

[lionheart69uk1] 09/8/2019 11:18

Which broker has a £26 target, MF?

[shanklin] 09/8/2019 11:17

...and there would probably be no stock market. LOL

[mad foetus] 09/8/2019 11:15

Clock tower is right about solid assets. If the rule of law collapsed and every breach of contract, tort and trust case was no longer enforceable and every lawyer in the world shut down because there was no work, BUR would have no assets worth speaking of

[babbler] 09/8/2019 11:14

TBF I bed MW didn't expect such a fall. They probably wanted 10, 20 or max 30 percent fall... it dropped 70 percent odd.. THAT'S what they didn't expect.. as a company you would be fuming at the effect and the source of it all...had it been less damaging perhaps MW would have got away without a case against them. Perhaps.

[tsmith2] 09/8/2019 11:13

may be at £18 or so the market did get ahead of itself but at £8 it's a stonking buy?

[adnan17] 09/8/2019 11:11

The key question people will have to figure out is how do you value this company. If it was a low growth company it would have a low P/E or P/B multiple. But this is a high growth company so the P/E or P/B multiple should be very high (above 20 for P/E).

But what makes it difficult is forecasting the amount and timing of future income, hence very difficult to put a multiple or come to any conclusion on which multiple to use.

A fast growing tech company or other ones such as Fevertree or Boohoo will be valued at 20-40x P/E. But you have a sense of predictability of future income and timing.

A fast growing bank will have a multiple of 1.5 - 3 times book value. But once again you will have a predictability on how quickly the loan book is growing and the interest rate they are charging.

This is what makes Burford so unique but for long term investors difficult to accurately value.

[clocktower] 09/8/2019 11:11

Regardless of the rights and wrongs, the question remains - were they over valued by the market prior to the short attack, and was it just a domino effect that once commenced wipes the whole floor?

Where is there any real value and at what level?

What solid assets are there?

[mad foetus] 09/8/2019 11:08

Worth remembering that CG first sowed the seed of doubt and their TP was still £11

[williamcooper104] 09/8/2019 11:07

Winsome - Bur claim that most of their fair value adjustments happen in the year before settlement Which while giving comfort also begs the question as to why bother with the adjustment Perhaps they ought to record at cost unless they have part sold an asset - so it would be cost unless there's a proven market value

[billwave] 09/8/2019 11:06

Suggesting that returning to a value only 40% of the brokers recommendations and 65% of the market cap before this MW fiasco I believe is leaving quite a hefty margin to incorporate those infected by the seed of doubt. Just my opinion of course. We'll see, but I suspect those same doubters are kicking themselves for not getting back in yesterday morning.

[minerve 2] 09/8/2019 10:58

I wouldn't be so confident.

Once the seed of doubt is sewn it rarely disappears completely.

[billwave] 09/8/2019 10:57

The brokers are issuing notes in the 2400 region, the instigators of the fall have closed their short positions, are rubbing their hands together with glee and have more than likely taken long positions here to double up on their winnings. It's easy to see what has happened here so I wouldn't spend too long thinking about it. Over 1000 by early next week would be my forecast. DYOR

[winsome] 09/8/2019 10:55

BUR claim they are very selective on cases and that their loss rate is low and that markdowns have so far been rare, just one in fact. Let's make a bad case scenario where suddenly they lose a lot more cases and rightdowns reach 10%. Still not a train smash.

Now look at all the major REITS over last decade where most of their PBT has been due to gains in the value of their real estate rather than rental income. Should another recession hit then those unrealised gains (created by not very independant valuers) could be hit with a 30% drop if no one wants to buy commercial property. Yet no one is screaming about this. I'd rather be in BUR in such a scenario.

Any why not attack Manolete for same accounting method as BUR? Because they are not a woodford stock, that's why. Not such an easy target.

[minerve 2] 09/8/2019 10:54

Show me a portfolio with stop-losses at 10% below current market prices and I'll show you a portfolio destined to lose 10%.

[minerve 2] 09/8/2019 10:52

Ooooh, someone was offended by the truth! LOL

[sogoesit] 09/8/2019 10:52

Far too complex adnan17.
But legal outcomes will be a statistical distribution over time.
We can all do our Monte Carlo analysis based on that and it should be sufficient imv.
(Seriously!)

[luckymouse] 09/8/2019 10:51

Minerve 29 Aug '19 - 10:49 - 8661 of 8662 (Filtered)

[sapper2476] 09/8/2019 10:51

They have made their money here and I suspect they really didn't expect to get hit with such a response and now would like to fade away in to the background to issue bonuses and slaps on the back. I suspect BUR won't let that happen.

[1corrado] 09/8/2019 10:49

Not easy to climb to new level.

[minerve 2] 09/8/2019 10:49

You can see the numpty thinking....."it is now 815, so I'll put my stop loss at just under 800p, yes 799p, that'll do!"

LOL

Trader Bot OWNS numpties thinking they are clever on their stop-losses.

[babbler] 09/8/2019 10:48

they will be gone soon... it's only 1045!

[adnan17] 09/8/2019 10:48

Some of the criticisms have come from mark to market accounting. How do you adjust the market value of a litigation case when there is not a market for most of the cases (excluding Petersen and Tenver)? Hence Burford should provide a very detailed and clear example. For example they could state we previously valued an asset at $10m, but given that the judge as ruled in such a way we have now valued it at $15. And then booked the extra $5m as a profit in the P&L. Detailed colour should be provided on the judge's statement and their reasoning for the change in asset value.

The majority of investors are not lawyers hence will not understand how a judge or jury decision will affect the final outcome. A court's final decision is very binary in nature.

The only analogy I can think of is as follows (given that I'm not a lawyer). If I sit at a poker table with a total of 5 people that has a payout of $50, is my initial value $10 because my chances of winning are one in five. If one player gets knocked out does my value go up to $12.5. If we are down to 3 players does my value go up to $16.6 and if there are only two players does my value then go to $25. Hence my profit in my P&L is $15 (25-10) even though I still haven't won but have increased the likelihood of winning. Replace the word people in my example to "key factual points" in a court case.

[mwainw1973] 09/8/2019 10:46

People still tentative and the major move yesterday, just think it's the natural order of investee levels of risk preferences, some will wade in as yesterday and some will creep in when it's more solid