Burford Capital Share Discussion Threads

[rar100] 25/3/2021 10:31

Bits of the IC were positive, 75% and 25% negative

The institutional investors bit impressed me, has made me hold rather than sell which I was going to do today. If it's good enough for them it's good enough for me.

If David Ricardo were alive today, I'm sure he'd be a big investor :-)

Donald, I do hope you are right about the trend, that's how I and many folk think. 'Cor blimey guv, said the Cabbie 'That Burford Capital's a buy if ever I saw one'

And if it's good enough for a London cabbie, well you'd be plain daft not to invest now wouldn't you.

I can't afford it, but I'm going to buy some to average down a bit - and retire in 2023 when the new bond and the share price have gone from the Moon to Mars.

rar rates BUR a buy, you heard it here!

[donald pond] 25/3/2021 09:52

Given that results were published intraday it is an unusual situation, but in my experience the day after results is normally the best guide to the likely trend from then on. People have had time to digest the figures, know there is no news imminent, and so are taking longer term positions now.

[riverman77] 25/3/2021 09:44

Don't worry IC will switch back to a buy once this is back above 1500. Buy high and sell low seems to be their method.

[stentorian] 25/3/2021 08:31

IC is an FT publication

[devalpha] 25/3/2021 05:28

I'd personally take a lot more notice of Greg Alexander's Conifer Management purchase of 14m shares @ £4 last March than anything the IC journos have to say.Bruce Greenwald, the Columbia University finance professor, quoted at the start of a talk given in 2010 by Li Lu at the University, that Warren Buffett's 3 favourite investors were Li Lu, Seth Klarman and Greg and that he would trust them to invest his money when he was no longer able.I don't think the IC or FT journos would figure on his list.

[djderry] 25/3/2021 03:32

That IC article seems quite hostile.The main criticism seems to hark back to the devastating impact of the MW attack on the shareprice.We've had this discussion before.If investors are going to be scared and shaken out by spurious shorters,that's not the company's fault.They rebutted the so-called report,made governence and board changes and listed on the NYSE.
The more troubling accusation in the IC article is the fall of 6% in operating profits.Ok.Did they not mention that after $8 million dollars related to listing and other regulatory expenses,cash to pay staff and keep the lights on,finance costs,and cash to manage the funds,which,the company anticipates,will produce fees ( I think they mentioned circa $50 million) at maturity,that the company produced $ 249 million in operating profit.
Why didn't the IC mention that?
That's money available for investing in new cases.Why no mention of that?
Without mentioning it,they go on to talk about the proposed issuance of loan notes.The inference being,to this reader at any rate,that Burford has no cash for new business and so must keep going to the debt markets to feed a nasty cash deficit.
Not so.
They made $249 million operating profit.
They have an SWF that contributes ( at present) most of the cash to get just a slice of the profits.
They are raising money,as they do,in an opportunistic fashion,not having raised anything in the last couple of years.
It suggests to me even greater ambition to add to the growing portfolio.
The IC article is certainly capable of being misinterpreted.
Why so negative?
Finally,the company,as we know,eschews forecasts.
But let's play.
On the projected EPS quoted by the IC from 'some brokers',for 2023 of $2.36 ,I make that,on a P/E of 30 ,just over £50.
I think it's an underestimate.

[djderry] 24/3/2021 21:23

Continuing to dig into the numbers, acceptance rate for 2020 was 4%,as impressive as ever.

[compo62] 24/3/2021 19:28

djderry - thanks for your positive and insightful summary. However, I don't buy the "business for sale" angle. It would be like Picasso selling his painting business.

fwiw I am long here since 2017

[tradertrev] 24/3/2021 19:27

Wow! - hold - bullish!

[lomax99] 24/3/2021 18:58

As positive as ever:IC:Burford plays to a new audienceThe litigation finance specialist's US listing could affect future dividend paymentsFrom Aim to the New York Stock Exchange: Burford Capital's (BUR) ascent through the equity league tables is the sort of journey bourse bosses like to crow about. Yet with its share price still trapped below the level it first sank to after a damaging 2019 report from short seller Muddy Waters, the litigation finance house is less of a poster child for growth than a warning about market exuberance and volatility.Naturally, Burford debates the fairness of that characterisation. So too, it would appear, does a fresh intake of backers: since October's US listing, there has been considerable churn at the top of the shareholder register. After long-term holder Invesco, stateside investors Conifer Management LLC, CI, Coltrane Asset Management and the Texas teachers' pension fund now occupy the top five institutional investor slots.Mithaq Capital, a Saudi investment firm backed by the Al Rajhi family, is now the largest investor with 10.5 per cent of the business.Headline figures for Burford's first set of full results since its secondary float were well flagged a month ago. "Capital provision-direct assets" – that is, legal claims funded directly by Burford – generated $325m (£237m) in cash proceeds in 2020, a rise of 55 per cent year-on-year. Indirect assets, managed on behalf of fund clients, generated $173m in cash.Despite apparently limitless options to re-deploy those proceeds – group-wide assets increased to $4.5bn in the year, $2.9bn of which is attributable to Burford's balance sheet – a record period for cash realisation failed to translate into an increase in operating profits, which dipped 6 per cent.Management put this down to the cost of subsidising third-party funds today in the hopes of netting future performance fees. Burford therefore absorbs all operating costs, but books around half of each dollar deployed.After Covid-19 forced a suspension in the dividend this time last year, a final 12.5¢-a-share pay-out is welcome news for long-term holders, though anyone hoping for a formal distribution policy may be disappointed. Management expects to maintain the dividend at its current level, but demand for cash elsewhere in the business and the tax inefficiency of pay-outs for US investors means this will be reviewed "from time to time".Highlighting this demand for working capital was a separate announcement of a fresh private market bond offering, to raise $350m for general corporate purposes and on unspecified terms.Consensus forecasts are for earnings of 138¢ per share this year, 97¢ in 2022, and $2.36 in 2023, when several analysts predict a windfall from the Petersen case. We remain neutral: hold.

[rar100] 24/3/2021 18:29

Except the share price has crashed after a short seller said the Co. was corrupt, and the share price has never recovered IN 2 YEARS and many shareholders are looking at 70% losses.
Peterson is always jam tomorrow, and maybe/probably never.
Not my idea of a winning combination.
And all the main figures were minuses, not by much but nonetheless ALL of them.

[djderry] 24/3/2021 17:43

Like many others,I listened to the conference call and examined the slides.I've just listened to the entire call again.
Lots of stand-out points.The growth in the overall portfolio in a pandemic year is nothing short of real outperformance.As mentioned,this,in a year of substantially lower deployments and much higher realised gains is a tremendous result.
For those asking about recent performance,you are getting a really positive indication when they indicated some 140 million of unrealised gains.The timing may be uncertain but,as we've seen year on year,that cash ( and ,of course, substantially more) comes in.
For me,that's a key indicator of continued success.
Management,as ever,impressed.However,I found Jon Molot to be particularly telling.As he explained what 'an unusually attractive ' business it was,I could see the for sale signs going up.
What odds a flood of offers from PE?
Of course,the key takeaways included, not just being in a great business,not just being the best of the best in that business ,but the best brand, best underwriting team, proprietary database and added value fund management and ( free) ongoing advice to clients.
A winning combination.

[dekle] 24/3/2021 15:15

An impressive list of new executives joining the company in important markets around the world

[williamcooper104] 24/3/2021 14:36

Likewise I didn't see anything on that Just that cash/new case in H2 was around 2019 levels

[williamcooper104] 24/3/2021 14:34

Would just mean I pay stamp duty on my far too frequent trading in the stock

[williamcooper104] 24/3/2021 14:12

The undrawn commitments are roughly equal to year end cashEven if only 16 percent of those typically crystallise in any one year we are still not swimming in cash, especially as Bur will want to fund a lot of the uncommitted capital commitments - again wondering why they are bothering with the divi given that equity is going to be hard to raise, and debt is both risky and expensive

[williamcooper104] 24/3/2021 14:08

Great set of accounts in terms of presentation/ease of use The cash bridge for the year and since inception notes are very useful Net asset growth of 11 percent looks a bit pedestrian If we adjust profits for amortisation and US listing exceptionals I get to a P/E of just over 10Price to book we seem to be 1.09 and 1.98 adjusting for Peterson

[riverman77] 24/3/2021 13:27

These are good results but unfortunately nothing here that is going to revive the share price any time soon. For that we need to see some big case wins come through, but probably have to wait for the H1 results for any news on that front. More patience needed I'm afraid.

[dekle] 24/3/2021 12:35

Was there a suggestion of a move to the main market?

[tradertrev] 24/3/2021 12:30

Shares trade at 11x P/E on earnings from a pandemic-affected year with no contribution to those earnings from Petersen. Petersen in for nothing IMO.

[riverman77] 24/3/2021 12:28

Unless I missed it can't see any reference to recent trading (eg any big case wins in Q1). That was the main thing I was looking for as we already knew the figures.

[bjfanc] 24/3/2021 12:27

Given they have listed on NYSE, not sure a move from Aim to main market, would add anything further.

[donald pond] 24/3/2021 12:27

I think the other key thing is the level of gains in the funds which the results say pave the way for "significant future performance fees". A quick reminder, the funds are all on a waterfall, so the clients get repaid their investment before BUR gets any performance fee, but then they get 20% of any excess. So getting past that initial threshold is key to quite chunky fees coming back.

[dekle] 24/3/2021 12:26

What a great situation where we have more potential customers(litigation) than products(cash)but able to get more products(cash) to meet demand