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US trading Today, (Thursday) over1.57m shares. Notably in 4 15 minute periods just over 0.25m shares traded, which according to impact on share price were purchases. The US price advanced from a low opening at $8.62 to finish $0.54c higher at $9.16.
Rene, I first noted total trading of over 1m shares on the Barchart site but the detail on trades during the day did not make sense, so found the after hours data on Nasdaq site. Barchart has many pages of data to look at, including analysts views (though only 2), and option prices.
Shaky, interesting but the $841m includes the funds from which Burford shareholders benefit only in respect of management fees, the returns in funding provision on Burford are historically in the region of 95%.
I posted an assessment in January and have just updated for a typo error and a low estimate on interest costs, so here the revision, which is not significantly different, and broadly in line with the higher estimates from Travis Wiedower and Emeth Value.
Burford portfolio at year increasing by 0.3m in 2021 to around $3.25bn, and case resolution assuming a slower case resolution rate averaging around 4.5 years until CV19 delays resolved gives annual gross income of $903m, assuming profit to cost ratio of 125%, (longer resolving cases result in higher returns in Nov 2021 presentation). Then deduct Op expenses $80m, financing of $60m, and incentive costs of 10% $90m, being total costs of $230m, giving PBT of $673m and tax at low teens percentage, say 15% resulting in PAT of $572m. GBP per share £1.92p, and PE ratio of 15 gives share price of £28.80p.
This does not include potential from performance fees for assets under management and a good Petersen result.
Monday looks like a great days trading, Not so sure the 300k was a sell, it could have been a buy triggering the 5p price jump after 1pm. In New York Shares rose over 3%, to finish at $9.42c at ex rate of 1.344 that’s £7.00.
Looks like one transaction to Buy nearly 290,000 shares yesterday, total shares traded nearly 580,000. Note also higher volume of trades in US over last 5 days.
Worthwhile to checkout a 7 minute video by Christopher Bogart titled “What’s ahead for Legal Finance in 2022” posted last month on Burford website, indicating more future opportunities.
I acknowledge that the court are frustrating, but Burford potential is still strong.
Looking at Portfolio at mid-year having possibly increased by year end to $3.3m, and even assuming a slower case resolution rate averaging around 4.5 years until CV19 delays resolved gives annual gross income of $917m, assuming profit to cost ratio of 125%, (longer resolving cases result in higher returns as per Nov 2021 presentation). Then deduct Op expenses $80m, financing of $40m, and incentive costs of 10% $92m, being total costs of $212m, giving PBT of $705m and tax at low teens percentage, say 15% resulting in PAT of $599m. In GBP per share £2.01p, and PE ratio maybe 15 gives share price of £30.
Don’t forget further potential from performance fees for assets under management and Petersen of course.
I would not expect much impact from inflation. Legal fees incurred would be the first charge against the case recoveries, and Burford win the overwhelming majority of cases. As regard damages or settlement, the values would we more aligned to the current cost of restitution, so may increase in line with inflation. As regards Burford’s operating costs, those should be more in tune with overall case activity.
I cannot see any change in the short positions declared since Gladstone at 1.2% on 6th October and Kulvari at 0.54%.
Would Flakey kindly explain where he gets this info from.
Regarding Heru's question, short interest is about Investment Groups taking a bet in a possible future price fall for a stock by borrowing shares from other Investment Groups (for a fee), and selling shares in the hope that they correctly judged the market and can buy them back at a lower price, return the shares to the lander, and take a profit. It the shares subsequently rise rapidly they would need to buy back quickly to reduce their losses.
The following is the link to the FCA website, which lists the reported short positions of more than 0.5% of a companies stock, changes of which have should be notified daily by 3.30pm.
https://www.fca.org.uk/markets/short-selling/notification-and-disclosure-net-short-positions
However the FCA may not update very promptly, as did happen (when Muddy Waters made their initial Short Attack in early August with 3 reports there was nothing reached the daily update report until late on 7th August).
WSJ compared the analysts prices given to the last week’s closing price of $11.51, so will be per share. Usually the price in US converted at exchange rate is within a few pence of UK price. However during last week with the increasing prices the US price was occasionally 20c above the exchange rate converted UK price.