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I am still buying below 60p, for the reasons I mentioned previously in this thread.
In addition, LIT has had a 25% increase in applications from last year, demonstrating the growth in the demand for funding, due to rising legal disputes, brought on by the pandemic.
MANO claims that they have experienced "zero impact" from COVID-19 and plenty of business to choose from moving forward.
Whereas LIT claims there will be a "minimal" impact on their revenue, as courts had been disrupted during the beginning of the pandemic.
MANO's cases are generally shorter and do not go to court. LIT's cases have on average a longer duration and do need courts, hence some cases will have experienced delays. With these delays some revenue will be deferred, but not lost. The demand for new business is still very strong and they can shift the portfolio to include more insolvency cases + courts are now functioning again, as they have gone virtual.
MANO's update is a positive sign for LIT. LIT's stock offers the best value.
So I dont risk boring you please refer to earlier posts on this thread. Dont be lazy. Do the research.
Forensic, you are very high and mighty in your comparison between MANO & LIT. Their respective profit before tax figures are likely to be similar for the year, and fundamentally they both operate in the legal services sector (unlike your silly comparison of Tesco and BP...) so why is MANO valued 288% higher than LIT?
You also omit that Burford were also valued at 4 x their current share price this time last year, so prior to their current problems the market certainly valued them very highly indeed, suggesting that negative sentiment rather than business models is the reason for the current valuation discrepancy.
The depressed share price here has to be linked to the poor share price performance of it's most comparable competitor BUR. Even though several commentators and LIT themselves have confirmed they book revenue much more conservatively than BUR they just cannot seem to shake the negative sentiment and mistrust in the sector. At the end of the day positive results will drive the share price and this lull could be used to build a stake with a good risk to reward ratio IMO. I believe this will come good in the next few years and expect to be significantly above 60p.
LIT has same PER as BUR as that is the correct business model comparable.
Likening MANO to LIT, is like saying Tesco should be valued on same metrics as BP because it has some petrol outlets. You need to research deeper into the core operating models of all three. Best of luck.
It has been a quiet share. The management was supposed to move to London in March, that has been disrupted obviously.
The company will grow out of its current valuation, with demand for legal disputes likely to grow due to the pandemic's impact. As of August LIT will be the only funder able to operate in Australia, until local competitors can also obtain an AFSL.
LIT's portfolio value and strong track record will get the recognition it deserves, especially if Burford bounces back following their new US listing. Coverage of LIT will not remain so limited, as its market cap increases.
Furthermore, LIT's accounting is different to Burford's, as it uses a cash-based accounting policy, only including revenue on its books when it is received. Muddy Waters claims about Burford are specific to that company, they are not saying that there is a sector-wide issue. Even so, Burford are going for a US listing, which should be a positive catalyst for the sector.
Simon Thompson (Investors Chronicle bargain shares) has commended LIT's performance/prospects and has recommended buying their shares several times at higher prices.
I'm buying at this level for the long term, while shares are mispriced, analyst coverage is limited, the company itself is not making much noise + the market cap and float is small. Markets have also recovered, probably getting ahead of themselves and I'm not finding better entry points for businesses that can still flourish in both worsening or improving economic conditions.
forensic I am comparing two legal industry businesses that have very similar financial positions and then comparing their stats, I am not performing detailed analysis but are you honestly telling me that MANO is worth double even though both companies have very similar positions? The nature of their business is not a sig factor in this method of valuation
The decline is largely linked to negative sentiment of the sector when Burford Capital , the sector leader, was criticsed for creative accounting practices exaggerating their worth, LIT however practices very conservative and transparent accounting practices but still got tarred with the same brush as they operate in the same sector, if you compare the charts of both you will see that LIT was over £1 when Burford went off a cliff and has bled lower ever since along with further falls in Burford. Personally I think Burford is still too questionable to trust even though it may have more immediate upside after such large falls, but they have debt and are trying to force growth too hard for my liking. The market should start to give credit to LIT for it's progress as the results do the talking eventually, it could take a few years but they seem good value right now for the large growth potential plus small divi which they have announced they will pay annually around Sep/Oct, 1.7p I saw suggested by one analyst, so around 2.75% on current prices.
This is incorrect. LIT's business model is most closely aligned to Burford: the pure funding of third parties' litigation on a global basis. Nick Rowle Davies (CEO of LIT) was previously MD of Burford outside the USA. The models are identical.
In contrast, Mano is a specialist buyer (and only very rarely funder) of UK insolvency cases only. As they are able to BUY their claims, that gives them full CONTROL. They are the claimant. For this reason their metrics are far superior and therefore the company is rated very differently to LIT and BUR, who have no control. Mano cases take months to complete, BUR and LIT cases takes many years. Please research these different models very carefully before making invalid comparions.
hi dago, this share is incredibly undervalued, it just doesnt get much coverage. No reason for the steady decline to be honest and if anything it will benefit from COVID as some aussie businesses enter into liquidation. Announced last week that litigation funders require a AFSL license and LIT is the only one in Australia to hold this license. The future definitely looks bright, if you compare this to MANO it goes to show that either LIT is severely undervalued or MANO is massively overvalued, either way two very comparable companies with a massive differene in mcap.
Simon Thompson has also written several articles on LIT over year and is one that he recommends too, would expect coverage from him soon.
Would strongly recommend this share
Hi all, i am looking at investing into this company, seems sound, strong balance sheet, prospects etc, but struggling to understand the steady decline in sp over the last year, could anyone shed some light? Also how come this share is so illiquid? Thanks