Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
@ffcmember it's highly highly highly unlikely Burford will settle the bonds at any point soon. Any receipts they get would be wasted if not funneled back into cases
Also, if they were going refinance they'd be doing so at much more expensive levels than those prevailing when they were issued.
Burford's business will experience wild swings in earnings depending on realisations (which will be lumpy); one year the PE might look v expensive vs cheap the next and so on. Furthermore, Burford's balance sheet is made up primarily of its cases (admittedly with about half held at cost), you can get a better sense for what you're paying for than the PE ratio if you look at it through a P/B lens. Last year when people were piling in at 4x book value or what have you, it was asking a lot of portfolio level returns even when the PE was low (imagine buying a portfolio of stocks marked at £10 for £40). Now, at 0.8x book, it looks like a no-brainer.
ThomasBrowne, it's usually best to look at financial companies like Burford on a P/B basis rather than a P/E basis.
thomasbrowne: "if burfords auditors give us a clean bill of health , then they are responsible for any mistakes or misrepresentations"
Please don't interpret a clean audit as a good bill of health, it's folly. Look at Lehman, Enron, Bernie Madoff, Valeant, AIG...the list goes on
I know the audit industry pretty well. There's NO WAY the people conducting this audit are intimately familiar intricacies of litigation finance. Bear in mind how new and small this industry is - auditors won't have litfi specialists on this.
I actually found Caro-Kann's analysis of the accounts the most comprehensive if you haven't seen it already.
I've been around investors my whole life and it's usually the glass half full types who lose their shirts....
But I will agree that this latest MW report seems to be clutching at straws. You can see that by the size of their proposed adjustments (-35% vs -30.6%....doesn't seem material)
Quite clearly Burford's share price hasn't clawed back from previous MW attacks.....its share price is half what it was when MW launched its first salvo.
Bonuses???!!!! Earnings down; stock price down. Where are these bonuses coming from?
"Argentina’s economy minister has sought to raise the stakes with the country’s bondholders by suggesting his government would consider defaulting on $65bn of foreign debt unless investors engaged in negotiations to alleviate its financial burden while tackling the coronavirus pandemic."
Still can't figure out just how Burford expect to collect on their YPF claims.
You're kidding yourself if you think the MW team won't be combing through the financials right now looking for ammunition. I'd expect a release from them sometime in the next week or so.
Also bear in mind that it was a HUGE annual report and it will take days for brokers and buy-side analysts a few days to digest that information and update models. Then I think you'll get a sense of how the results have really been interpreted.
I'd really stop focussing on technical factors with this one. I doubt day traders are really as important as this board would have you believe. They're practically extinct in professional money management anyway.
Wow the formatting really messed up.
Also an FYI, all deployment figures in USDm
I'll try this:
TVPI -- Deployed -- % Deployed
<0.75x, -- 98.40, -- 14.2%
0.75-1x, -- 15.4, --2.2%
1-1.25x, --167.7, -- 24.3%
1.25-1.5x, -- 148.8, -- 21.5%
1.5-1.75x, -- 45.4, -- 6.6%
1.75-2x, -- 87.4, -- 12.6%
>2x, --128.3, --18.6%
Total, -- 691.40, -- 100.0%
Hi All,
Downloaded Burford's investment history pdf and converted it into a database. Please see below for a return distribution for their cases. This only includes concluded investments and the realized portion of concluded investments (aka there are no unrealized investments in the below figures).
TVPI = total value to paid in capital = ((principal + proceeds of investment) / principal of investment)
Total investment count = 131
TVPI Deployed % Deployed
<0.75 98.40 14.2%
0.75-1 15.4 2.2%
1-1.25 167.7 24.3%
1.25-1.5 148.8 21.5%
1.5-1.75 45.4 6.6%
1.75-2 87.4 12.6%
>2 128.3 18.6%
Total 691.4 100.0%
Hope all are doing well. Just an FYI, I had a call with a large distressed hedge fund that has also developed a litigation finance franchise. They're seeing an increase in dealflow on that side of the business amidst all this. Firms are scrambling to get liquidity so are generally keener to monetize their claims.. Hopefully a positive read-across to Burford's pipeline provided they're not too busy fighting fires themselves.
Classic vacuous speculation
To be fair, Burford does provide all the information one would need to form an opinion of their investments, it's just extremely complicated which...muddies the waters. However, I don't truly think there is anything wrong with their valuation methodology. People often overlook the fact that Burford is not just investing for its balance sheet but also through funds on behalf of institutional investors. I know the diligence processes of these firms and they're not frivolous by any means, and a key focus is always the valuation of the underlying assets.
It's presented pretty clearly in the financial statements. Cash receipts are reinvested, just as they would be in a stock portfolio. It's mistaken to think of this like an industrial business or similar.
It's a broader swipe at the general quality of posts on this platform. The chat is littered with people saying "back to 800", "up to 1000", "sky's the limit", "big buys at the close", speculations about short squeezes and so on.
It's about time some of them were called out as hollow, echo-chamber inducing nonsense.
That post was about a month ago, and we're welllllll below 700 now (not so say we won't be soon - because I have NO idea where this is heading short term, much as no one else does).
What I am more confident of is the long-term prospects of this sector and (for the timebeing) Burford's leading position within it.
If I may remind you of my comment:
"Why are you wasting bytes typing this stuff as though you have any idea where this stock is moving in the short term"
I think this is a great stock, but comments like yours bug me because they add no value to the discussion. Pumping the stock on this forum is going to have NO impact on the price, and would be illegal if it did.
Just read the RNS, overall seems pretty decent but one thing I find slightly worrying is the let up in deployment. This is undoubtedly a growth market and $45m less in deployment in 2019 vs. 2018 seems strange to me…
Do wonder how the MW attack has affected them at the coal face with clients. You wouldn’t want to be funded by a firm you thought was going under
Why are you wasting bytes typing this stuff as though you have any idea where this stock is moving in the short term
25% in a couple of weeks. No news. Does anyone know WHY?