Juridica Share Discussion Threads

[lavalmy] 27/9/2013 17:19

Accountancy used to be a strength of mine, but since I qualified I have moved on to pastures different.

Put it this way. If you buy shares of XYZ plc at £1000. You then sell half for £600. You have made £100 profit to go out and spend. JIL treats the whole £600 as profit and is currently paying that out in dividends. I do not pay tax in the UK but, if I did, I would be furious. All those 'dividends', paid mostly from capital, are taxed as income.

I believe in the business, but would prefer that the business retains its capital to reinvest for the future.

Cheers

David

[wan] 27/9/2013 13:00

LaValmy...Accountancy is not exactly my area of strength, but the dividend yield is what it is, a payout which is then reflected/reported in percentage terms against the shares price, which is not make-believe in my book. Obviously if you think the NAV will increase substantially, you ultimately believe in the business and therefore think a re-rating is a likely event. If this proves correct, a decent dividend yield in the interim is a very nice bonus!

[lavalmy] 27/9/2013 11:37

The yield is pretty much make-believe, in the sense that they have been treating all returns as income and nothing has been allocated as a cost of investment. Any fund manager will spot this. They may not mind, Woodford's High Income is the biggest shareholder after all. I, OTOH, do. I do not wnat to deplete my capital.

I'm still holding because I think the NAV will increase substantially in the next 18 months or so, but will not rely on greater fool theory to put floors under the share price beyond the fundamentals.

I would add that a good pal of mine had some cash invested with a litigation financier who managed to invest zero in any cases. Some years later he got his money back, less fees. So maybe, the value is in the management? If they restructure?

Cheers

David

[wan] 27/9/2013 11:11

I actually I found the IC's piece both interesting and enlightening. I did however, spend a few hours catching up with events, results and prospects etc and decided that a few shares were worthy of going into the long term portfolio. In the interim, a very nice yield (with the prospect of more to come).

Plus a really liked the potential from the tie-up with ipCreate.

[azalea] 27/9/2013 11:03

I'm in this morning with the last few pennies in my account. Given current rock bottom interest rates this surely is a must for those sitting on spare cash and looking for both a high return and capital appreciation.

[cb7] 27/9/2013 08:17

My thoughts are these. I am not too focused on the nav. I foresee them paying about a 10% dividend for the next few years, based on the present price of 150p. That alone should not only put a floor on the price, but push it to 200p. I bet that is the logic behind the IC recommendation.

[dashton42] 26/9/2013 18:25

JIL tipped in Investors Chronicle today:

[lavalmy] 19/9/2013 14:50

Jonwig

I had thought about that too. Who knows what others do and why?

I, too, am positioned in things which should do well regardless of the macro environment or equity valuations in general. Agressively so, though that does not mean I think general equities will not carry on upwards. I only invest specificallly, not generally. I am very concentrated on some growth companies, where income is not a possibility for some time. So the prospective coupons from JIL are welcome; they will cover our annual outgoings. Slightly old-fashioned of me I know, but I loathe having to sell anything to fund expenses.

Cheers

David

[jonwig] 19/9/2013 14:29

LaValmy - interesting insights, thanks.

But one more positive, maybe: some of us investors are much exercised about current equity valuations ... reliance on more stimulus, continuing high corporate earnings, etc.

My own portfolio is weighted a bit to non-correlation, which means litigation financers [JIL, BUR] and catastrophe insurers [CAT, BGCR, IRIS]. My straightforward equities are defensive (I hope).

I have to wonder if JIL is attractive at *above* NAV for these reasons!

[lavalmy] 19/9/2013 13:30

I am relatively complacent at this level, though if it trades significantly higher than NAV without news, I might reconsider. Three points make me sanguine.

Firstly, I still believe that they have about 50p of NAV up their sleeve, based on the price paid for the manager in December - I know that NAV did not increase by the expected percentage at the interim stage, but they did not write down the carrying value of the JCML stake. This presumes that the performance fee they expect JIL to pay remains above the cost of the investment (proportionally). We must remember that JIL and JCML have a much better view of the underlying cases and activity - this does lead in effect to a conservative value for JIL's NAV, and a less consevative one for JCML. My beliefs about this do not in any imply that I would pay NAV plus 50p, but it serves as a cushion. Without this, I wquld probably have sold at current prices.

Secondly, they are expecting a lot of activity in the next 18 months. It would be a shame to miss out on this - it may even put a bit of froth onto the share price

Thirdly, the continuation vote and possible restructuring will be a positive, especially if they can move towards regularity with the dividend. I don't know what the timescale for this is, but given notice periods etc, I would expect something reasonably soon.

I really can't explain the sudden attractions of JIL to cause such a move as we have had, based on no increase in NAV since last year-end. I certainly was not expecting the discount to narrow until substantially more NAV had been realised, but I'll take it.

Hoping for interesting times

Cheers

David

[c1d] 19/9/2013 07:36

I was concerned about the diversification into another area and sold my remaining stake. I found it hard to understand the logic/fit of the investment from the RNS but that might just be me. Now the share price is close to net asset value I was considering selling anyway - the RNS just gave me the final push. Hopefully it will be a great success and Juridica will continue to do well. Good luck everyone.

[djderry] 18/9/2013 20:00

Ok guys,thanks for your posts.I'll pretend I now understand what they're up to! I just hope they're not doing a 'deworseification' (spelling?) as Peter Lynch might put it.Anyway,time will tell.

[lavalmy] 18/9/2013 14:15

Hi All

I'm not so sure about all this - OTOH I posted some time ago elsewhere that JIL's patent portfolio did not seem to be performing terribly well. Perhaps this is a recognition that fact and a means to do something about it.

Okay, so there is an additional layer of fees to be paid, but only on a rather trivial $2mn. This assistance to ipCreate (not a very creative name) as a key investor probably enabled them to raise the rest, a pretty trivial sum as well. Maybe a quid pro quo is to help increase the outcomes and speed up resolutions for JIL.

The patent litigation space was (and is, I think) one of the most picked over. Techco's, investment banks, hedge funds etc piled in. So I imagine good returns have been hard to get. Maybe getting in bed with these guys is shrewd, if they can really turn cost centres into profit centres?

I hope that JIL sticks to its knitting, particularly the anti-trust space. From the interims, it does seem that they have lined up a good spectrum of cases. Let's hope that they get the cash in soon to fund them.

Cheers

David

[hieronymous1] 18/9/2013 11:55

I imagine that their clients are either defending intellectual property or suing alleged infringers. Spending money on legal fees is always a pain. So any way to turn a cost into an opportunity by way of making better use of their IP would be welcome. Juridica are acquiring the expertise to offer such advice.

[jonwig] 18/9/2013 10:31

djd - yes, it's a bit arcane!

Some of the case studies on the ipCreate website give an insight: patents and associated law is pretty specialised and many companies will use consultants (like these) to advise.

Also, of course, they will be able to point possible legal infingements in the direction of Sullivan Law! All very American.

What it also does, I think, is start the move away from a pure litigation portfolio.

[djderry] 17/9/2013 20:20

I'm reading this,but I don't really understand it,apart from the bit about introducing new potential customers.Except where my cash is in investment funds,where the managers do the job,I need to understand what my single stock companies do.I'm afraid the water is getting muddy.

[whilstev] 17/9/2013 10:56

Sorry about the multiple posts pc threw a wobbly.

[whilstev] 17/9/2013 10:54

Small mention here

[whilstev] 17/9/2013 10:53

Small mention here

[whilstev] 17/9/2013 10:53

Small mention here

[jonwig] 17/9/2013 07:45

The beginning of a movement away from being a pure litigation funder?



ipCreate:

[davebowler] 10/9/2013 16:01

Liberum;
Juridica Investments (NR) – JIL is likely to distribute at least 14p in January with potential for an additional 3p from recent exits (11.5% of the current share price in total). We believe management's rhetoric guides towards further special distributions to shareholders over the next year, highlighting one specific investment that could add at least a further $0.22 to NAV. Assuming 10% NAV growth from profitable realisations (82% average IRR on realisations to date) and total distributions in January 2014 of 17p, generates a total return of c.21%.

[djderry] 30/8/2013 18:56

I would't be surprised if it's been caused by institutional buying,they'll get a 10% dividend and a good news story for their shareholders.

[orchestralis] 30/8/2013 13:25

Slowly, slowly catchee monkey

[orchestralis] 27/8/2013 13:42

Still showing some strength I see. We could see £2 soon at this rate.