Burford Capital Share Discussion Threads

[henchard] 12/8/2019 23:12

riverman,

"Stocko figure is wrong (as so often is the case - more or less useless in my view). Net assets on the balance sheet (2.25bn USD) versus market cap (1.7bn GBP or just over 2bn USD). So now at slight discount."

I don't know where you got your net assets figure from but its not the last balance sheet (30 June). My calculations below show the shares at a 27% premium to book.

Net assets (last reported, 30 June): $1,567,036,000

Current shares in issue: 218,649,877

Net assets per share: $7.17

Share price: 755p (at current exchange rate of £1/$1.21 = $9.14)

P/B = 1.27x

[psychochomper] 12/8/2019 23:06

Johnwig, Johnwig, Johnwig!! Humans are too stupid to organise conspiracies for the most part. But even more stupid are the people who believe in them.

What is more notable is your 25 hour a day posting complaints of those “posting here 24hrs every day”.

How much have you lost, mate? If only ‘something for the weekend’, why so many tantrums?

[dudishes] 12/8/2019 23:04

You (post 10122), are johnwig, the loser? Yes, I am Tim W of course, as many others are.

[dudishes] 12/8/2019 22:58

Moons ago, we cooked the books at a club. Taxman arrived, took us for £800, but also found our accountant somewhat lacking, refunded us with £1000, so £200 up and cost to Customs, another £1K. You cannot make this stuff up!

[johnwig] 12/8/2019 22:57

Please distinguish between me johnwig and jonwig the dodgy founder of this thread and many others of very doubtful purpose.

[dudishes] 12/8/2019 22:54

You can put whatever valuation you like, as the books are edited prior to E & J sighting.

[chucko1] 12/8/2019 22:51

Riverman, I would agree with that. I see its value as a bunch of existing assets (howsoever so valued) plus the expected discounted value of future net proceeds from claims financed. This means the costs of running this business are higher than that of an investment company, but with increasingly valuable additional assets. One can argue as much as one likes over the first part, and once bored with that, start another over the second part.

[meanwhile] 12/8/2019 22:41

Is nobody else on this site interested in the preparation of gravy?

[riverman77] 12/8/2019 22:40

Regarding book value v PE. I've thought about this quite a lot and don't think BUR should be treated as a simple investment company any more. I see it increasingly as an investment bank for the legal services industry so think PE is more appropriate measure.

[dudishes] 12/8/2019 22:40

SK2, Aye, TXO! Aye, Drunken Sailor, I knew that bit, muddled about the other. Never mind Sir, at this time of night, visiting UK, I am that drunken ex matelot!

Damn good fun, what!

[riverman77] 12/8/2019 22:36

Stocko figure is wrong (as so often is the case - more or less useless in my view). Net assets on the balance sheet (2.25bn USD) versus market cap (1.7bn GBP or just over 2bn USD). So now at slight discount.

[williamcooper104] 12/8/2019 22:20

But then again add in that maybe 30 percent of your NAV is Argentinian sovereign debt (38 percent upfront on the CDS) and the corporate governance

[williamcooper104] 12/8/2019 22:16

Yep - that's exactly it And if you adjust the PE for Peterson (treating it as exceptional) then it's still cheap but clearly not as cheap The 1.43x as a fund isn't cheap cheap but not necessarily expensive given negative yielding fixed income markets, zero beta asset class

[chucko1] 12/8/2019 21:59

Argentina, over just about all other sovereigns, has a history of defaulting owing to its unwillingness to repay rather than its inability to repay. For example, if memory serves me right, in December 2001, Argi defaulted on its external debts while having a debt to GDP of under 40%. Compare that with Japan at 245% currently, U.K. around 80%, France, Spain and others in Europe somewhat higher than the U.K., and Italy over 130%. Argentina was unwilling to repay because it could not face the prospect of the IMF measures it would have to endure in order to prevent its debt increasing significantly (and so a debt to GDP of 75% or so). This would explain why the external bonds of Argentina (and hence the CDS) got creamed today. This has to be in the main why BUR got creamed today also, whether or not their model has any Argi CDS parameters!

Argentina has defaulted eight times since 1816. So that’s once every 25 years, so I pity the pension funds and insurance cos holding the long dated debt of this country. In particular the holders of the 100year bonds!! Of course, they can trade them, but the century bonds were down at 55% today.

Seems I’m making MW’s case for them which was not what I had intended. But when the facts change ...

I recognise that this Argi legal matter does not ‘directly̵7; rely upon the ability/willingness of Argentina to honour its cash flows. But it does at least increase the probability of a bad outcome as compared with the situation on Friday.

This method of probabilistic discounting is now widely used to value complex financial products, and has increasingly been employed since 2009 when pure interest-rate based discounting was found to be deficient in just about all circumstances. Did BUR grow too quickly to focus on this, and perhaps associated things? If so, it’s an issue, but not one that merited the nature of the MW attack - unless they still have this trick up their sleeve.

[dudishes] 12/8/2019 21:58

bbm, sorry, was referring to yr previous post.

As for this lot (BUR), I ask again the question, why not bounced to previous price?

Maybe fair value? Somehow, doubt it.

[dudishes] 12/8/2019 21:54

bbm Not sure of that dog, is it a hint, or a nod?

your research is somewhat better than mine, no offence, but I tend to get out more, smell of the sea and all that.

[topvest] 12/8/2019 21:54

This from Stockopedia seems to summarise the latest conundrum:

P/E Ratio = 6.02 - wow, that's cheap

Price to book value = 1.43 - maybe not!

That's the conundrum...should it be valued as if profits are continuing or as an investment company.

Views welcome as there seems to be little comment on this thread as to what a fair value for Burford actually should be.

[henchard] 12/8/2019 21:53

Devalpha

"Ultimately the question I ask myself here is...do I trust Bogart & Molot to be astute, shrewd and fearless stewards of my capital in the medium to long term? My answer is an unequivocal yes."

I'd be really interested to know on what grounds you trust them (objective? subjective?) and also why your trust is unequivocal?

I think it's widely acknowledged by everyone, including the company itself, that trust in the management is more of a key element here than with many other companies. Because of, for example, the marking to market of hard to value level 3 assets, inability to talk about the valuation of important ongoing cases so as not to give away anything to the opposing side, and so on.

As trust is so central here, I'd welcome some debate on the topic. Are there specific things people can point to that they feel demonstrate management's trustworthiness or untrustworthiness?

[devalpha] 12/8/2019 21:24

Anything can happen in markets....anything. You don't always get the immediate anticipated response to what looks like the correct action. We all have our own views here formed from years of experience in the market. Ultimately the question I ask myself here is...do I trust Bogart & Molot to be astute, shrewd and fearless stewards of my capital in the medium to long term? My answer is an unequivocal yes. Despite mixed opinions here, I think the RNS news this morning was excellent. You don't always get the hoped for share price response immediately, but I reckon it'll come. Give it time. I stand by what I said last week...Block's picked a fight with the wrong crew here. Good luck to all long term holders. Although this is painful in the short term for anyone with a genuine interest in Burford, it's also fascinating watching how things unfold. My trust is with Bogart & Molot. Let's see how the next few weeks develop.