Not seen that report before very good…. Interesting point made here
“With Burford, one of the key elements of their employee performance compensation is that it is based on cash generation. An unfortunate requirement of Burford’s accounting is fair value adjustments. When they release results, a meaningful amount of their “income” is from marking up what they think the fair value is of their investments. This can add subjectivity to their results, though I believe Burford has released significant evidence supporting their conservativeness in marking up cases. Importantly, Burford’s employee compensation does not incentivize them to aggressively markup cases.
“We do not include non-cash metrics like fair value in our compensation assessments… our general compensation philosophy is team-based rather than individual as we believe that investing in this asset class benefits from a team approach and not assigning individual ownership of and responsibility for individual investments.” – Burford Capital 2019 Annual Report
Finally, equity ownership is high throughout the company. The two co-founders have large positions as expected, but they have also each bought several million dollars more of stock over the past two years. In addition, each co-founder has $2 million invested in Burford’s funds and $500k in Burford’s publicly traded bonds.”
Started off with c5% portfolio investment after the MW short report. Some valid points made by MW but fundamentally I reckoned the business is a “new model” that was open to critic but on balance made sense. Along the way the more I understood the more I topped up. The story evolved and topped up when I could and topped up again. The price kept falling but the logic made more sense. It’s now 40% of my holding ( probably a lot more on Monday).
Here is the thing - it’s going to double again in less than 50 days when the SEC and EY give this a monumental valuation boost. If that sounds crazy read the RNS trading update… it’s all there in black and white.
Long term holders - I bet you are buyers on Monday
What a day … Quite a few of us have gone big on BUR over the last few years cos we believed… this could hit £25 easily in the next few months and us regulars know why - more wins and SEC & EY sign off.. Well done the Regulars … you know who you are the ones that have posted and the ones who come here to watch and listen and learn…
God bless you all ..
I sold out of this last week… ouch
Bought a good chunk last week and more today. I feel for the shareholders who invested on the back of the litigation and totally agree that the RNS’s painted a very Rosie picture but fundamentally I think it’s a good company with good tech and plenty of cash.
Thank you Sandy- very helpful and I appreciate your time. In the RNS before in January the following was said
“We have made very good progress in the half year to 31 October 2022. By the end of the period, the Baita Plai Polymetallic Mine (“BPPM”) team had created a platform for a substantial improvement in production volumes and efficiencies. This improvement has arisen from the restructuring of mining operations at BPPM in July 2022, which has increased monthly capacity and allowed us to deliver one to two deliveries per month of commercial quantity shipments in calendar Q4. The trend of increasing quantity and quality month on month is continuing into calendar Q1 2023, and further supports the Company’s calendar H1 2023 target of moving towards name plate capacity of 14,000 tonnes per month and profitability”
I get the are they on target or not but If they are on target with Q1 and the numbers and increasing commodity pricing especially copper are you a buyer/supporter?
This is now my biggest % holding. I started investing in 2020 and have added and added and added and again just added at the lowest entry of my all time purchase price. The saying ‘catching a falling knife’ is not lost on me and I’m not perfect in my investment decisions but … BUR it seems I’ve gone balls deep and if it goes wrong it will be by far my worst ever investment… but I’m as certain as I can be that I have got this right (we have got this right) and it will prove to be my best investment in terms of £ upside value to date.
The crux seems to be is the current Fair Value case valuation too high as Muddy W suggested or is it “fair” or is it “a low ball valuation”. As a shareholder i hope its lower thus the result will boost the SP … this is from the 2021 annual report
Notably, the settlement was executed in the late afternoon of December 31. It is not uncommon for year- end to be a driver both of litigation resolutions and of new business, and it is one of the reasons that our results for any particular period can be volatile and wholly unpredictable. Almost $100 million of our new business this year closed on New Year’s Eve itself. And some cases we were watching for potential resolution did not resolve, leading to a lighter year for realizations than we would have wished.
This example is also a demonstration of the potential value of older matters. Yes, it took eight years, but we achieved a handsome result. Previously, we reported a
34% ROIC and a 19% IRR for the 2013 vintage; with this realization, the vintage now stands at a 90% ROIC and a 21% IRR, with two matters still ongoing. Not every older matter will perform this way—some will lose—but all age means in litigation is that the process is continuing to unfold in its labyrinthine way. It’s simply incorrect to give up on the value creation potential in the continuing matters in older vintages.
Finally, this case also shows our fair value policy in operation. This case was held at cost originally, written up slightly when we won the initial motion to dismiss, written down following the initial trial court dismissal, written back to cost when reinstated following appeal, and written up when the case survived summary judgment. Ultimately, when the case settled, we had recognized slightly less than 25% of the ultimate realized gain, pointing to the reliability and conservatism of our approach. We provide full details of the fair value evolution in the investor presentation made available on our website
https://seekingalpha.com/article/4588508-burford-capital-delays-accounts-stock-drops-15-percent