Burford Capital Share Discussion Threads

[williamcooper104] 16/12/2020 19:06

Lots of shareholders still think as most of what MW said was wrong the share price should thus be £20 At high teens - 4-5x NAV the share price was overvalued - hence why management sold 50 percent of their equity

[williamcooper104] 16/12/2020 18:57

Yep - it's either NAV or else a DCF computed NAV; which ought to be higher than book NAV A simple multiple on PE doesn't work, given outlier cases, lack of earning guidance, volatile cashflows

[1aconic] 16/12/2020 18:45

Maddox: a multiple of NAV makes more sense to me for getting a more realistic snapshot valuation of current investments over using straight NAV. But in terms of trying to determine some kind of fair value, there surely would need to be an additional step along the line of compounding that on a repeated basis then discounting back?

[maddox] 16/12/2020 14:19

I don't subscribe to the notion that the share price need be anchored to historic NAV. A more realistic fundamental valuation of this firm would suggest a multiple of the NAV reflecting their highly attractive return on case investments.

[riverman77] 16/12/2020 13:49

I believe the market is giving zero value to Peterson (or possibly even a negative value - market so concerned about this case that BUR would be worth more it it didn't exist, which is clearly non-sensical). Under normal circumstances I would expect BUR to trade at least 2x its book value given dominant market position and ability to generate very strong returns.

[1aconic] 16/12/2020 13:29

William: exactly. That's why I think Rar's lofty expectations can only be met over a several years or with an outlier result in a case e.g. peterson.

[1aconic] 16/12/2020 13:25

Lazg: Turns out I do have it to hand. Jeffries reported it as $773m in their last note so about £575m at current exchange rates.

[williamcooper104] 16/12/2020 13:23

It is exactly that old debate The market is valuing it like that at moment - the US listing hasn't changed that More years of showing realised gains at historic IRRs and eventually it might start trading on a PE basis

[1aconic] 16/12/2020 13:22

lazg: pretty sure it's in the region of 700m but don't have exact figures to hand either

[kirkie001] 16/12/2020 13:20

I agree with the expectations of zero news flow this side of the results announcement.

Two things which might change that, perhaps....
- A pre-close update of year end cash balances, which perhaps talks about cash recoveries in H2;
- I seem to remember a secondary market transaction in Peterson immediately before a period end a couple of years ago (can't remember whether this was HY or FY). Now with the trial discovery process ongoing, I would have thought that to be exceptionally unlikely - but you never know.

I'd also expect a further tranche of debt issuance at the end of Q1/start of Q2 2021 - capital market conditions should be pretty benign given US election results, Covid vaccine and Brexit. Although that's obviously absent any "new" shocks....

[1aconic] 16/12/2020 13:19

William: I guess that goes back to the age old "how do we value this company discussion". Personally, I don't currently believe that valuing BUR using NAV is the best way (especially when considering non-ypf investments) but I definitely listen to arguments for that approach and the market does seem to be broadly taking it currently. My own reading is that given BUR's (debatably) conservative mark up policy on live investments, that NAV potentially grossly underestimates the value of the current portfolio and almost entirely ignores the scope for growth by reinvesting proceeds. It's on that basis that I say peterson has essentially zero value attributed in the share price even if there's some on the balance sheet. But it all comes down to subjective case valuations... because of my own background, I think probabilistic expected value calculations are a reasonable way (despite the subjectivity inherent in them) and will (hopefully) be used as part of BUR's appraisal of potential cases.

[lazg] 16/12/2020 12:56

William, how much is Peterson valued currently? I don't have the figures at hand.

[williamcooper104] 16/12/2020 10:51

A few months ago when the share price was at or below NAV ex Peterson FV then there was zero value attributed to Peterson

[williamcooper104] 16/12/2020 10:50

Peterson has a considerable book value and Bur is currently trading at a premium to NAV - so there's clearly some value/quite a lot of value ascribed to Peterson - a successful outcome will generate proceeds much greater than current value but that's what you would expect

[1aconic] 16/12/2020 10:44

rar, I'm surprised you're still here - thought you would have left the room after the NYSE listing. Given the moves the share price has actually made in the last few months you're clearly looking for insane out-of-this-world movements in a tiny space of time. If that's true, in BUR's case the unmissable elephant in the room is obviously the Peterson case. Given your aspirations, instead of posting nonsense about LSE listings (anybody who's paid the minutest attention over the this year would know that's simply not even on the table now that the NYSE listing went ahead) and asking why the price isn't up this week or next week, it would probably make more sense to spend your time following the peterson case developments as closely as possible. One credible *theory* to explain part of the recent downturn would be Argentina having been granted a 90 day extension for discovery... in truth, nobody knows. Obviously peterson is just one element of the bigger picture and there are plenty on here (including myself) that believe that peterson is being given virtually zero value in the current company valuation. However, developments that make that apparent to the wider world may take longer than you appear to have patience for...

[djderry] 16/12/2020 04:50

As the company continues to collect cash as outlined in the last results ,I would not be surprised to see a redemption of the 2022 bonds.

[gettingrichslow] 15/12/2020 23:02

Rar, do you have a ruler in your house? If you do, get it on to the 3rd chart at the top of this page and you’ll see it’s a fairly straight line upwards from late March until now. What more do you want?

[lomax99] 15/12/2020 20:50

Are you short?

[scubadiverr] 15/12/2020 20:32

You've been here long enough to know that a full LSE listing was only if they didn't secure the NYSE listing, which of course, you know they did.Volumes on the NYSE can be checked on here. Search BUR and both the AIM and NYSE will be available.

[rar100] 15/12/2020 18:37

It would be good to read views on why the share price is stuck in this narrow band for so long.

Is there any news about BUR listing on main market in London, (like when is that to happen).

The trading volumes are very small in the UK for a long time, is there more action in the US?

Any answers and views welcome.

[alter ego] 15/12/2020 15:53

there's an echo in here

[achenaton] 15/12/2020 14:58

Thanks for reply Jeff H.

[achenaton] 15/12/2020 14:24

Thanks for reply Jeff H.

[achenaton] 15/12/2020 10:31

Thanks for reply Jeff H.

[glawsiain] 14/12/2020 21:35

Sebastian maril tweeted this earlier

"In a week we will have several news in the case for the expropriation of YPF:
- What happened to the Petersen companies' locked Discovery.
- Decision on Burford Capital's request to reject the hiring of new lawyers for YPF (Debevoise & Plimpton)."