Burford Capital Share Discussion Threads

[donald pond] 24/1/2022 09:49

It was always supposed to be uncorrelated to the wider market. There's been a 13 year bull market so that thesis has never been tested. That is the big unknown but if you think easy money is coming to an end then it should be good for litigation

[time_traveller] 21/1/2022 21:24

$9.17. Yup, I feared this happening; price and investor interest/patience wanes, whilst the markets were booming, smashed in the correction, and now the recovery has to battle chill headwinds - come on burford, it'll need something good (results/Petersen/?)

[loglorry1] 21/1/2022 17:51

Lots of macro headwinds for 2022 so ibthink we can easily see £6. On balance it's ok to add here.

[scubadiverr] 21/1/2022 17:30

Hopefully you timed it well but US bombing as I type. I topped up at 7.38 so feeling the heat at the moment

[williamcooper104] 21/1/2022 17:26

Meanwhile my trading position was restarted today below 7 and my long term holding was added too as well

[williamcooper104] 21/1/2022 17:25

Agree the CMD was what I took a lot of confidence from If Peterson is a failure it's likely to be a court win followed by a very long period of time before it stops trying to collect/collects a small sum (assuming worst reasonable case) But if that happens it gives lots of time for the CMD to work it's way out - possibly two spins of the money By which time not collecting on Peterson will not be so material relative to todays share price (Eg it will be a share price loss to a much higher share price so little to worry about)

[williamcooper104] 21/1/2022 17:22

If ftse falls 10 percent then easy BUR could do 15

[divmad] 21/1/2022 17:17

Houseofpain1, don't you mean "That's more than the current market cap", which is $2bn?

The single digit PE on your numbers does depend on the expected 3-year average time to settlement still applies in future cases, covid-notwithstanding.

I'm assuming a cash settlement on YPF will be years away, even if BUR wins the court case this year. Worst case scenario, and all that.

[houseofpain1] 21/1/2022 16:12

Certainly if these current market conditions persist then the share price will go lower but for anyone with a 2 year plus investment horizon this is a time to be adding to Burford.

The CMD was transformative for me in that it gave me confidence that the downside is well-underpinned. If the modelling is accurate then there is approximately $3.8bn to come back from the existing ex-YPF portfolio. Taking off gross debt and 3 years' costs reduce that figure to around $2.2bn. That's more than the current market cap. So a negative value is being attributed to Petersen and ongoing/future business.

You therefore have an uncorrelated business growing strongly trading at around NAV and on a single digit PE which would return you more than the current market cap if it was put into run off today.

Notwithstanding this pretty compelling valuation set up, the shares need a catalyst. Ideally we'll get some good numbers in February/March but, failing that, it seems inevitable that Petersen will, finally, provide that catalyst this year. Assuming that it does not settle, I believe that Burford will win the case. It's pretty straightforward - the by-laws/prospectus set out the steps that had to be followed on a renationalisation of YPF and Argentina didn't follow them. They then settled with one shareholder (Repsol) when they sued them but not Petersen/Eton Park. Whilst anything can happen in litigation, I've spoken to as many bears on the stock as I can so as to try to avoid confirmation bias and not one of them thinks that Burford will lose. Their negative view is predicated on Burford being unable to collect. And Burford may well have a battle on their hands there but it's one they are well-resourced to fight. For my part, I still think it's far from certain that Argentina would ignore a US court order...

Let me know what you all think - particularly if you disagree!

[time_traveller] 21/1/2022 12:38

The chart looks awful to me - But with the 1 year high 40% above us, it seems barely credible it could lose a further ~15% to revisit that old £6 support .... on nothing!? I get the impression some regulars here, got out much higher up - well done! I top sliced too, but put it back in at 750.

[williamcooper104] 21/1/2022 10:29

Tricky oneBur looks cheap but if you are bearish then it's beta will likely make it cheaper yet

[tradertrev] 21/1/2022 09:36

See first and ninth items on this page.

[loglorry1] 21/1/2022 09:01

"The new guy just hired to the London office won a huge claim against Venezuela at his previous firm Calunius"

Any more details on this ?

[loglorry1] 21/1/2022 09:01

Nibbled a few more down here for my sins.

[tradertrev] 20/1/2022 18:14

The new guy just hired to the London office won a huge claim against Venezuela at his previous firm Calunius. Not certain but I think they got paid out. Pretty useful knowledge for BUR given that Venezuela makes Argentina look like a AAA credit.

[loglorry1] 20/1/2022 13:59

I'm pretty sure BUR are well aware of that. The Sov Argie bonds trade at around 25% of par. One can argue that a court award if achieved would be senior to that but it does reflect what sort of discount we should apply. Before you also say YPF are on the hook, I know that but they have little $ cash too. They need all they have to refinance their own debt. The Argie Gov would have to recapatilise them first in $ that they certainly do not have.

The law is pretty clear on these types of claims. A court could award Burford $10bn but if Argintina doesn't have it then its time to start negotiating and Argintina doesn't have a lot to offer and Burford can't easily inflict much in the way of pain.

The latest similar case was Cairn when the Indian Gov didn't pay after losing a tribunal. Cairn got paid in the end but critically India has plenty of money to cover that liability.

[time_traveller] 20/1/2022 12:50

Then tell burford that!

[loglorry1] 20/1/2022 12:34

If any of you think Argintina will cough up $800m to make it go away you are delusional. They are completely skint and currently negotiating with the IMF for survival.

[time_traveller] 20/1/2022 12:29

It would to the 10% investor in Petersen at $100m (the name of whom I forget without looking it up). Others too.

[lomax99] 20/1/2022 12:15

So a, say, $800m - $1bn settlement on an initial investment of c $18m would be poor?

[time_traveller] 20/1/2022 11:54

If it's less than $1b, then there would be serious questions to answer. But recovery with a settlement should be straightforward and high probability.

[loglorry1] 20/1/2022 11:27

My personal view on Petersen is that they will probably win but it takes years to conclude and even when they win they need to collect which is much harder than people here think it is.

[brileyloucan] 20/1/2022 11:24

In my view Petersen clearly in the price. If they lose and write off $770m this will get hammered. I actually think if they settle and get $770m (or whatever the number is to take account of bonus accrual) to get to a zero p&l event this would go up a bit as it would remove uncertainty and make things a lot cleaner.

So I feel (maybe) upside on Petersen is not in price.

[loglorry1] 20/1/2022 10:53

Bought a few more but looks like it could test 600p at this rate. Maybe Petersen getting kicked yet further into the long grass. And before you all shout I know Peterson isn't in the price (but it is really).