Burford Capital Share Discussion Threads

[luckymouse] 19/8/2019 22:28

Argy Sov CDS have tripled - but not hugely blown up like they can - doesn't that just mean insurance against sov default costs 3 times more that the avg? It doesn't mean an asset is worth 3x less is my lay understanding - and seeing as we are not calculating the price of a bond which goes down as yields rise - its the insurance element or its equivalent proxy that mainly counts I presume.
I cant value it of course, and I suspect almost no one here can either lol - apart from the odd credit analyst that might look in - but I suspect it may be less dramatic than some here are trying to sell it.
If the cost of your house insurance triples that's annoying - but your house is still there.

[stentorian] 19/8/2019 22:19

Those same 40 institutions will be lobbying US Govn, World Bank, IMF etc. on Argentina attempting to evade sovereign liabilities - especially if they are American.

[williamcooper104] 19/8/2019 22:18

Plus if the purchasers of the Peterson claim bought it at say a 15 IRR then if Bur think they can invest at more than 15 then they should sell

[williamcooper104] 19/8/2019 22:16

To the extent that seocndary market players feel burnt it will be over Argentinan credit exposure rather than litigation as an asset class

[stentorian] 19/8/2019 22:10

BUR have stated that 40 institutions have participated in secondary market deals that is hardly a few players. You'll have to ask the 40 institutions concerned if they feel their fingers have been burned.

BUR is relying on Secondary Market cash to an extent...they just sold 10% of Petersen (note the spelling) for S100m. The $100m will be reinvested in more litigation claims (probably not in Argentina). How's that for diversifying its exposure?

[williamcooper104] 19/8/2019 22:03

Trident5 - there were 11 odd bidders on the last Peterson stake - if you're a hedge fund seeking alpha with minimal beta then it's an attractive investment - in a negative yield world all the much more The fact that sovereign credit spreads blew out last weeks is all the justification you need for the sale - they've realised 10x in cash Of course they need the cashflow - because they've a huge pipeline to fund If they didn't need the cash to invest then the business would be a lot less valuable - however you value it

[trident5] 19/8/2019 21:57

To what extent is the secondary market limited to a few players and how many feel their fingers have been burned on Peterson after recent events in Argentina?

And to what extent is Burford relying on secondary sales for cash flow and marking up rather than as a means of diversifying its exposure?

[williamcooper104] 19/8/2019 21:55

It will be interesting Unfortunatly they won't break the adjustments down per case - which is frustrating but do understand why The accounting treatment critics forget that if IMF or LIT had sold 10 percent of a claim for 100m they would struggle to convince their auditors to keep the rest of the claim at cost of less than 20m Fair Value can lead to accounting distortions but so can holding at historic cost

[henchard] 19/8/2019 21:51

Williamcooper104,

I find myself agreeing with a lot of your comments on BUR.

I think BUR does fair value revisions only on a 6-monthly basis, so it'll be interesting to see what happens with Peterson's fair value next time up.

(Personally, I lean towards an assets rather than earnings valuation.)

[williamcooper104] 19/8/2019 21:44

Take a view that it should be valued as an investment trust but at a discount because of corporate governance and Peterson now being worth a lot less because of sovereign credit spreads blowing outIf you do all this you could get to share price target of c£3-5

[williamcooper104] 19/8/2019 21:41

Yes - and Peterson is most of the Fair balance sheet adjustment to their balance sheet hence why I don't think the marks are unreasonable But that's not the issue - it's whether it should be valued as an investment trust or on an earnings multiple The former implies £8-11 range and the later £15-25 (so long as Peterson performance can be repeated)

[henchard] 19/8/2019 21:37

Gladstone "Investment Strategies" snippets:

maximize risk-adjusted absolute returns whilst preserving capital ... seeks to achieve its objective by investing primarily in listed equity securities in Europe, the US, Australia, South Africa and Canada as well as other developed markets. Investments are focused around five core sectors: Financials; Telecoms, Technology and Media; Healthcare; Consumer; and Industrials.

"Method of Analysis" snippets:

a fundamental research approach to seek to identify structural winning and losing companies and industries ... investment process will generally include meeting the management of the company in order to validate the investment thesis as well as assess the company's ability to execute their corporate strategy. Furthermore, the Firm, will, where applicable, conduct interviews with market participants, competitors, suppliers, intermediaries, private equity firms, perform divisional analysis and site visits. In certain circumstances, the Firm may hire consultants and/or perform surveys to better understand and validate the investment thesis.

[henchard] 19/8/2019 21:32

Gladstone's rising short position in BUR:

16 Aug: 1.03%
15 Aug: 0.99%
08 Aug: 0.82%
07 Aug: 0.77%
06 Aug: 0.65%
04 Jun: 0.50%

It would be interesting to know what Gladstone's short thesis is on BUR but I can't find anything specific, and there's not too much information on it or its general approach.

includes sections on its "Investment Strategies" and "Methods of Analysis" and is about as close as it comes to getting any kind of handle on why it may think BUR is a good short bet.

[minerve 2] 19/8/2019 21:31

getting

Yes, I did lose on Kier. Not embarrassing, just happens from time-to-time.

You seem to be a serial fanboy loser though. PLUS, BUR, PURP, MRO....anymore?

LOL

When you get around to posting any rationale on any stock then let us know, eh?

I want to frame it! 😂

[tracy_moore] 19/8/2019 20:51

I was hoping one of the bashers might have seen it, but then Clunton and corridor (same poster ) wouldn't understand the relevance anyway.

[metis20] 19/8/2019 20:48

UT was 284k at 790.5p value c£2mn

Petersen case - secondary market value - listen to this clip between 23:00 and 26:30 -



Gladstone short - only up by 0.21% to 1.03% between 8th and 16th of this month.

[1oughton] 19/8/2019 20:30

Back to the dishes Bore.

[tracy_moore] 19/8/2019 20:22

What was the closing UT today ?

[edmondj] 19/8/2019 20:16

According to this source they have certainly doubled from 0.5% in August, scroll down:

[trident5] 19/8/2019 20:12

Gladstone almost doubled their short in the last 10 days.
The new CFO's most relevant experience seems to be raising capital.

[1corrado] 19/8/2019 20:02

You guys are all dreamer back to 700 and less by Friday watch this space.

[edmondj] 19/8/2019 19:57

Gladstone has edged up its Burford short, over 1% to 1.03%, also ASC to 1.31%.

[adnan17] 19/8/2019 19:22

Minerve - what price did you buy Burford? When did you sell? What made you sell? Why don't you go back in now? Are you reluctant purely on current sentiment? Sentiment in stocks can change in my view.

I bought at £1.73 few years ago. I could sell, but genuinely believe that given their ROIC the share price could easily go back to £20, maybe even higher once all the governance issues have been hammered out and it gets a US listing. So my estimate is roughly £25 in say 2 years. So from the current share price of £8, I could see £25 in 2 years time. Hence, I could triple my investment.

Appreciate others may disagree, but after doing my own diligence that is what I believe.

[gettingrichslow] 19/8/2019 18:20

Why don’t you post your Kier success too Minny? Bit embarrassing eh??