Burford Capital Share Discussion Threads

[gettingrichslow] 09/8/2019 14:51

SweetK, you seem very impressed with MW, but why exactly? Did you not see the stuttering performance on Bloomberg? The numerous schoolboy inaccuracies in their report? Their tendency to say ‘BS’ to everything!? (like a teenager)
Are you easily impressed by huff and bluster?

[borg45] 09/8/2019 14:47

Predictions where share price will finish today

[brexitplus] 09/8/2019 14:47

Annan

Good advice.

[adnan17] 09/8/2019 14:45

Sweet Karolina, your post made me laugh. You definitely are a shorter probably working for MW. Thanks for the advice though, lol.

I'm not a day or week trader. I try and take the Warren Buffet approach. Buy a business which is undervalued and hold on until it becomes overvalued then sell.
Not sell on basis of greed and fear or market volatility. In two years time nobody will care what happened this week.

I purchased my analysis at £1.73 back then I focused on P/E and Book Value.

I am now reassessing my fundamental analysis and will focus on Cashflow and appropriate multiple. So that gets me a range of £16 to £21 based on cashflows shown on the 2018 accounts.

Believe it or not I didn't panic when it fell from £15 to £3.80. Just like I didn't panic when prices collapsed in 2008.

May I recommend you the book "Intelligent Investor". It tells you to ignore Mr. Market and focus on the fundamentals of the business.

[brexitplus] 09/8/2019 14:43

Babbler

Moss Bros??

[babbler] 09/8/2019 14:41

that was before the suit was announced

[brexitplus] 09/8/2019 14:40

MW tweets yesterday were

“$BUR should address balance sheet debt vs balance sheet equity - THAT is what’s relevant.”

“Question about $BUR carrying value of Petersen. Excuse for not answering: It’s “work product”. BS”

“On $BUR call now. We will have a full response of course. Molot’s presence is pointless, as he’s not addressing any of the points - just purporting to summarize our publicly avail report.”

Whether they follow up on these or something else we wait to hear with bated breath.

Tweet 3 suggests MW wanted to draw Burford out but failed.

[williamcooper104] 09/8/2019 14:36

Sk - agree - very unlikely that MW will not respond IMO Bur management and MW are more alike each other than they'd care to admit - highly arrogant and not shy of a fight

[babbler] 09/8/2019 14:34

doubt they will come back. Might even have been given a seice and decist order. It is the US after all.

[williamcooper104] 09/8/2019 14:34

The reported IRRs are at the very top end of what a PE fund would do Don't doubt the asset class It's just a pig to value the equity

[sweet karolina2] 09/8/2019 14:34

Adnan,

I think you have hit the nail on the head: "both net income and Book Value/Fair value is subject to choice of accounting."

Unfortunately there is no scientific way to answer your underlying question.

What I will say though is excessive positive sentiment drove BUR well above whatever that real valuation is. MW corrected it and maybe over corrected it and now it is oscillating unpredictably between fear and greed.

You are looking for a price to sell at, maybe you should be looking at a time to sell.

Nothing is certain, but a response from MW is almost certainly coming and it will drive the share price down - how far and for how long depends to a large extent on what it says and what BUR's reaction is.

The most likely time for the MW response is Mon but it could come today, but that would have limited impact and give BUR the weekend to respond. Maybe what BUR has already said in its written response and call will make MW take longer to dig deeper and the response will be later next week. However I think MW not responding at all is highly unlikely.

I hope this helps you make your own decision, which is unique to your own position and I wish you the best of like in whatever decision you make. Focus on whatever return you do get not on what you could have got making a different decision at a different time. It sounds like you will take a nice profit whatever you decide whenever you decide to take it and nice profits are never to be regretted.

[brexitplus] 09/8/2019 14:30

WC agree about 3i.

I think the short average Burford turnaround of 1.7years gives it an advantage over PE, which equally has the occasional very big winner.

Top quality due diligence is everything in this game.

[brexitplus] 09/8/2019 14:24

SK

It will be interesting to if/when MW come back what they have and how Burford responds. The Burford response to my mind was very good.

Burford, like every good lawyer, only responded to the specific criticisms in the report. They should/will have gone through all aspects of the business and brain stormed possible outcomes/responses. They probabably do so on a regular basis. It’s what I would recommend to clients.

And of course they dropped in market manipulation.

I only have a small holding - not enough by far to cause me any problems, but interesting enough to see how this pans out.

[williamcooper104] 09/8/2019 14:21

Have made a lot more than that holding Bur

[williamcooper104] 09/8/2019 14:19

Get compounding in a listed evergreen fund Never said that Bur didn't warrant a premium to NAV - but that if you value it that way you get to a much more lower valuation than if you apply on earnings x

[sweet karolina2] 09/8/2019 14:19

"Any one claim is of course risky but a collection of them is much less so"

Fully agree and it is the amortisation of risk across multiple claims that is so hard to judge. IMF's figures over 17 years show a return of 1.5 times investment is about the right amortising factor, then you have to take out all the admin and finance costs which leaves you with a respectable overall profit and positive cash flow to reward your investors with, but not the stellar profit and NAV growth BUR are reporting.

[adnan17] 09/8/2019 14:16

William I think thats where you determine what multiple you use. If you think it will be roughly steady then I think 7x. I.e. no further growth.

If you think it will be volatile with a bias to the downside then maybe 5-6x multiple.

If you think it will continue growing especially with the recent big wins (Tenver and Petersen), which they still hold and the recent increase in investments then 8x-10x.

But now that I think about it, valuing on this basis makes more sense as you are relying on cash received from the cases and what value do you put on future cashflows.

And like has been discussed at length, both net income and Book Value/Fair value is subject to choice of accounting.

[datait2019] 09/8/2019 14:14

Brexit u and William can meet up and talk all this nonsense over lunch instead of clogging up this board

[littlepuppi7] 09/8/2019 14:14

Shorts will be starting to panic now. 1000p plus is coming. And they know it. But how do they unwind

[brexitplus] 09/8/2019 14:12

WC, 3i currently premium of 25%. And as I remember SVG at peak was about 70% premium.

I was really talking about the fixed life funds as a comparison with Burford.

I am invested in ICG which in its early life was like 3i but now a major part is invested in fixed life funds from many PE houses.

The point I am making is Burford’s reinvestment of proceeds and hence compounding.

[datait2019] 09/8/2019 14:12

Wow William A++ for effort

[darius12] 09/8/2019 14:12

We made over 30k day trading this in a couple of days! Here's a copy of our statement

Subscribe to our youtube channel at

[williamcooper104] 09/8/2019 14:11

Anyone not is more than a bit sad

[williamcooper104] 09/8/2019 14:10

Thanks for posting thatKey thing is assuming a steady state eg like for like sales - then how much of the later years would be repeated on the same capital base and how much is exceptional