Burford Capital Share Discussion Threads

[trident5] 26/11/2019 16:24

DGDG - my point was that secondary sales do not of themselves prove that litigation finance works as a lucrative business model.

It's a nascent market and it's merely passing the parcel. Burford have generated a lot of their cash from secondary sales, and I suspect they have enabled write-ups on retained interests. The furore raised by MW and other doubters must mean it will be harder to generate good cash returns here going forward.

I am very struck that the CEO, having told us what a reluctant seller he was a couple of years back, has proved a reluctant buyer at these depressed prices. As too, his wife.

[dgdg1] 26/11/2019 16:21

It now looks as though the share price has been floating around the Berenberg target price of 810p, since the Berenberg report. That would be a fine example of people being blindly lead, as opposed to thinking for themselves.

[dgdg1] 26/11/2019 15:53

"Their big earners have not all resulted from judgements or settlements but secondary sales which (i) do not prove the business model works and (ii) are probably now adversely impacted by the MW attack." I disagree. I think secondary sales prove perfectly well that the business model works. It shows that Burford can make a profit by selling its rights when it has managed to increase their value. It's an alternative way to profiting than waiting until the case completes. I can't see the problem here. As for being adversely impacted by MW, I have no idea what that means. If it means that it will be harder to sell its rights on the secondary market, I can't see any logic in that. Any buyer is not interested in what MW says or even the financial position of Burford or what Burford says about each case, they will do their own rigorous due dilgence on the merits of each case and decide if it's worth it for them. So MW or the Burford share price will not make the slightest difference. Will be happy to be corrected if I have misunderstood your reasoning.

[pal44] 26/11/2019 14:50

like to see this motoring up again GLA ..

[winsome] 26/11/2019 10:36

This is still a company that has surprised with their results in a positive way every year since inception. Given the massive commitments to investments they've made past few years, the imminent realisations from them should be huge compared to previous years and should keep earnings momentum positive in 2020 even if there are no big receipts such as from Teinver or Petersen in 2020. So we pretty much know 2019 results will beat 2018 and I'm pretty confident 2020 results will be even higher regardless of Petersen, VW, or Australian class action progress.

[stockvalue] 26/11/2019 10:22

If the market would excludes the 2 dollar, i can buy 2 dollar for 1 dollar. That's common sence. Just a short seller who can't find real fraud beside china and still want to make money would follow that "we have to exclude" logic.

[stockvalue] 26/11/2019 10:13

"Their big earners have not all resulted from judgements or settlements but secondary sales which", thats incorrect. Source Burford: "At the end of 2016, at a point when the arbitral tribunal had decided the key question of jurisdiction in Teinver’s favour but had not decided the merits of the case. During 2017, the arbitral tribunal decided the entire matter in Teinver’s favour and awarded it substantial damages." You can also check that from other sources, since this information is public available. What you wrote makes no sense since no investor would buy cases that have not been judged or settled. In Teinvers case the investor deal was therefore combined with a put option which has expired than. When i have a stock which the market values 1 dollar, and there is a once in a lifetime earning of 2 dollar. Than the stock has to be valued at least 2 dollar. Why would anybody argue to exclude that 2 dollar?

[trident5] 26/11/2019 09:55

"Its completely idiotic, as some idiots like MW in the past have done, to exclude BUR's three or four big wins when trying to measure their worth overall".

The problem is that reliance on a small number of big wins will produce volatile results , lower quality earnings and a lower multiple.

Their big earners have not all resulted from judgements or settlements but secondary sales which (i) do not prove the business model works and (ii) are probably now adversely impacted by the MW attack.

[mad foetus] 26/11/2019 09:37

One caveat is that because BUR now does much more portfolio financing than single case financing, the likelihood of outsize wins and total losses is much reduced: rather than betting on individual horses we are effectively financing stables now. And since 2011 there hasn't been a single overall loss on any portfolio financing, so the risk is much reduced.

[winsome] 26/11/2019 07:59

Its completely idiotic, as some idiots like MW in the past have done, to exclude BUR's three or four big wins when trying to measure their worth overall.(not referring to you, dgdg1) They have other huge cases in the pipeline and always will have. We won't know about them all due to confidentiality but we do know about the class action against the Australian banks, and the VW scandal. Its only the moaning missed-the-boaters who harp on.

The beauty is that these big ones generate 10x to 100x initial investment. As I said earlier, its a no brainer, except to some of the no-brain muppets other. But let them waste their time posting to people who have filtered them anyway.

[stockvalue] 26/11/2019 00:56

Thanks to mad foetus for mentioning this report.hxxps://focusedcompounding.com/burford-capital-limited-lse-aim-bur/ Its interesting to read but don't expect any inside infos, it's basically nothing new in this report. Also it seems like the author has no financial background. Their are a few smaler mistakes also, for example BC was actually founded by 3 persons. Selvyn Seidel later left Burford. For me that was especially important in my due diligence process, because if there were any wrongdoings on Burfords side, it would have been likely that Selvyn Seidel would have brought them foreward. Since there is a dispute ongoing between Selvyn Seidel and C.B. and J.M.. Also i remember that despite their dispute S.S. mentioned Burford infront of a panel as the top Notch Guys in the space of litigation finance.

[gettingrichslow] 25/11/2019 21:39

How’s your Bango investment going Chimers?

[mad foetus] 25/11/2019 21:12

https://focusedcompounding.podbean.comThey are bullish on burford

[dgdg1] 25/11/2019 20:06

stockvalue, I'm not sure if you meant to disagree with me. If you did, let me explain that I completely agree with you that of course Petersen is part of the value. That's why I'm saying that Burford is cheap - because it seems fair to attach a value of about 250p to the Petersen case by itself (based on the last sale price), which means that at a share price of 800p the rest of Burford's cases and future potential earnings are effectively being valued in the stock market as not 800p but just 550p, which means the present price is much too low, compared to the future expected non-Petersen earnings.

[stockvalue] 25/11/2019 19:40

I think it makes absolutly no sence to value BC without Petersen. Of course you have to calculate with an estimated expected value, but even if it would be a one time event, you have to include it. In Petersen's case the expected return is magnificant in respect to the market value of BC, and thats exactly why i see that stock as undervalued.

[dgdg1] 25/11/2019 16:14

My last post also assumes there is no prospect of more future big wins like Petersen, which the company has been at pains to argue is not a reasonable assumption. Even if you were to assume a 50% chance of a claim half the size of Petersen every four years that also adds a lot to the valuation.

[dgdg1] 25/11/2019 15:44

winsome, I couldn't agree more, I really don't understand what is holding back the price. Of course Berenberg had a point about Petersen being a major part of profits but that is not exactly new, although it seems to be to some people (who sold). But the main thing is that if you strip out Petersen assuming a value in line with its last sale value (250p/share) then the rest of Burford is being valued at around 550p. It's then a question of what eps you think Burford can get without Petersen. I made a spreadsheet estimate of historic profits ex Petersen and I can't go over all the details here (you are welcome to try it yourselves), but basically I assumed that Burford will generally value Petersen at 75% of the last sale value, except for the small sale in 2016 where I guessed only 40% of sale value because it was such a small sale, so carries less weight. This is obvoiusly a guess and the calculation is not precise for other reasons, but I came up with a guess of $106m pre-tax profits for 2018 (this includes $31m from Teinver) and $99m in the first half of 2019 (including $7m from Teinver). However you look at it profits are increasing steeply even without Petersen, so even if you say that H1 of 2019 was exceptional and the whole year will only produce a total profit of $180m this is still an eps of 64p, so that means the ex-Petersen market price of Burford (550p) is on a pe of only 8.6 of the ex-Petersen earnings. I would be happy to hear if anyone else has made different calculations or can correct me if I have made any mistakes here.

[george stobbart] 25/11/2019 15:23

My friend Tom told me to Short Burford.

He says its free money.

[winsome] 25/11/2019 15:08

Still amazes me the mindnumbingly stupid posts on here by numbskulls who have nothing better to do. If they don't hold a position in BUR they should get a life. If they do hold a short position then they completely delude themselves that their idiotic posts will have the slightest impact on the share price given its large cap status.

Enough said about that. Investing is always about playing the percentages. BUR play the percentages extremely well re the cases they back. And there's a v high probability that in the next 12 months:

1. They'll have 2nd listing either in US or FT250 (or bought by Private Equity)
2. FY2019 will be a record year for net income and cash receipts (100% probability)
3. Petersen case will be a whole lot nearer to returning a multi billion pound award - making current BUR price extreme bargain territory.
4. Their NAV will increase sharply from today's.

The probabilities surrounding the negative stuff being touted by the shorters are otherwise very much lower. So its really a no brainer IMO.

[stockvalue] 24/11/2019 18:55

If markets would be efficient, there would be no room for profits. IMO the share is currently undervalued. I personally think about adding a few thousand more to my stake.

[gettingrichslow] 24/11/2019 17:30

rar, because markets are easily spooked. Glencore lost 87% of their value in the period leading up to 2015/16. They’ve tripled since then. Why?

[t 34] 24/11/2019 17:23

Quindell effect .

[rar100] 24/11/2019 15:31

6th Nov share price was 957, today £1.56 lower. Why.

[meanwhile] 23/11/2019 17:49

Ritz, Paris, 2022.

Yes, I’ll be there. Is there any particular date and time?

I’ll be bringing my portmanteau wallet, used in overseas travel, dimensions 65x32x20cm.

We’ll be out of the EU by then so I’ll also be bringing some Jaffa oranges and chlorine washed fried chicken.