Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Badjob: There's a definite bad smell around things but more on the ARG/Eskenazis side from what I can make out. ARG had the Eskenazis in court in Argentina in Feb. Why couldn't they get all the information they (claim to have) wanted there? Plaintiffs served a supoena and it's been ignored. Why is Preska acting like they're controlled by plaintiffs when they're not involved in the case? There are massive historical ties between the Eskenazis and the ARG government (possibly soured by the expropriation) and a corruption investigation over that in progress in the BsAs courts. The extracts of the Eskenazis testimony in Argentina that I've seen were vague and actually seemed keener to back the ARG gov's position. Plaintiffs didn't get an opportunity to question them, only the ARG side. There's something not quite right in all that and I haven't quite decided what I believe on it. Anyone managed to get any better take on that side of things (by looking at reliable sources, not just guesswork)?
lol sorry... only the share price disagreeing then... frustrations sometimes get the better of me... I'd love the price to go up as much as anybody...
Anyhow, in other BUR related news not related to short term price movements... current holding in JAGX not worth a lot but for those crying out for BUR related news of any type it might be of interest:
Jaguar Health, Inc. (NASDAQ:JAGX) ("Jaguar" or the "Company") today announced that the Company has entered a binding agreement of terms (the "Term Sheet") for a third non-dilutive royalty financing transaction, pursuant to which Jaguar would sell to the lender for an aggregate purchase price of $5 million (the "Royalty Purchase Price") a royalty interest in future potential crofelemer (Mytesi®) sales for the proposed COVID-related indication in long-hauler patients (as defined below), for which the Company is currently exploring the pathway of conditional marketing authorization in the European Union.
Jaguar intends to use the proceeds from the proposed transaction to support regulatory activities associated with the Company's development pipeline, including supporting the development program for crofelemer for the prophylaxis and/or symptomatic relief of inflammatory diarrhea, initially to be studied in a long-hauler COVID-19 recovery patient population (the "COVID-related indication"). This $5 million royalty financing transaction follows a $6 million royalty transaction consummated in October 2020 and a $6 million royalty transaction consummated in December 2020 with affiliates of the lender and is based on similar terms that will be outlined upon closing.
Absolutely, short term movements reflect sentiment far more than anything else. You can jump on a bandwagon and risk getting very badly burnt when sentiment changes or you can patiently wait for sentiment to change on a currently unappreciated stock. It's more a question of the investment style you personally choose rather than absolutes. What is absolute is that short term price movements don't reflect the true value of a company.
TWT: what part of what I said specifcally does the share price disagree with??? That PBT is actually massively up ex-peterson and ex-fair value adjustments? That's pure fact... do the analysis. Serious investors will be looking at factors like that rather than simply concentrating on relatively meaningless headline figures such as EPS that includes YPF related income.
My opinion on a hypothetical situation that the current share price was seriously influenced by MW/Invesco/Woodford? How can the current share price disagree with that?? The overhang from those factors are still present.
The other comments were my opinion about what might be needed to affect future share prices and not related to the current share price.
That's all aside from the fact that whether you think short term share prices mean anything whatsoever opens is a complex debate on investment/speculation styles which there is absolutely zero point whatsoever getting into... each person has to choose the one they feel right for themselves...
TWT: pbt is actually *massively* up ex-peterson and ex-fair value adjustments. That's the underlying trend that's far more important. That most certainly does cut it.
SP would have dropped without MW/Woodford?... don't even know where to begin on that one! Agree to strongly disagree probably... Somewhat I'm sure as it was "priced for perfection" previously and there was a lot of market enthusiasm which wasn't necessarily justified. Hard to see any scenario whatsoever we'd be at these levels though. If you add Invesco in as the other element alongside MW/Woodford, it's hard to see any argument that they haven't contributed massively.
I probably also disagree that stellar results are needed. Just the nerves around YPF to disappear and a few years of solid, repeatable results that illustrate that the wider portfolio is going to do its thing. The detail needs looking at, but it looks like the first of those has just been previewed.
YouOnly: great response!
Yup, I do fully agree that consistency of data is definitely an area for improvement. There are a mind boggling set of numbers to work through and they do tend to change each year. There was big improvement last year (but in some ways it made it even harder to understand). Some cross-sector co-ordination would help. I guess since it's a new industry it's a case of finding those that seem most informative and sticking to them.
There's probably a tricky balance to be struck between quality of information and the quantity becoming overwhelming. I think a lot of the information you talk about is already there! It's just buried in side comments a lot of the time. You have to work to root it out which isn't ideal.
I've done huge amounts of churning on the numbers to remove certain aspects (e.g. fair value adjustments) and put things in better context. Also some work to adjust for the time lag from investment to return... that's massive given the huge step up from 2017. They could do some of that themselves without ending up with information overload.
You're point about the hidden value in the funds is a massive one for me and it's definitely not immediately apparent. There has to be a simple way of presenting that in a form that gives some indication of the contribution being made pre-waterfall.
I'm not really sure I personally agree on the fanfare element or getting involved with counteracting every single bit of press misinformation... I personally believe that the best thing for management to do is to work on the business, not on the markets perception or the government supporting Argentine press (amongst others) crusade to discredit them! I see it as ill-spent time and an unwelcome distraction from doing what they should be doing (building the core business). I simply don't think people listen anyway - look how much time they've spent emphasising how lumpy results will inevitably be and yet people still scream when EPS is "down" on a previous year!!
The only thing that matters is results... eventually the market never ignores cold hard results.
I do get the impression that BUR work very, very hard on industry publicity i.e. awareness within law firms but that it's not necessarily evident externally. Hopefully.
I'm right with you that it would be nice if the SP were a least a bit more respectable. It doesn't really matter long term, but the biggest threat currently is probably a under value buyout. The SWF has 666m invested for just 40% of the returns... current total market cap is only around three times their current investment... somebody has to be looking at that
YouOnly: You've said you want management to say something but my question when these kind of statements arise is what *exactly* do you want management to say?
What information specifically do you expect them to provide that they don't already? The can't magic progress in cases out of nowhere.
What "leaf from some other's books" do you want them to take specifically?
I'm as frustrated as anyone by the lack of momentum in the share price... probably more so given how large my holding is.
However, this isn't selling cans of baked beans. They can only report the information they have and can't magic new information that the market will love out of thin air. The court system ground to a virtual halt last year. They can't report what simply isn't happening. That aside, the reasons why they do limited reporting are also well explained throughout time.
I agree that information presentation can improve (in annual/interim reports) massively and could be far more digestable without huge amounts of effort. There was a big step forward in that respect in the 2020 annual report and I'm personally hoping for further steps this year.
However, I'm also realistic in what I believe management can do to change (what I strongly believe) is the current gross mis-valuation by the market. Generally, announcements in recent times have just produced very short lived spikes good to nobody expect short term traders.
One element I personally believe is that Peterson is scaring off institutional investors whom are well documented as caring more about their jobs than getting maximum returns for their investors. Peterson is in the home stretch and not far off resolving one way or another. Until it does I don't personally think there's much management could say to change the current overall market caution.
Even believers in BUR like TimeWillTell believe the price will fall after results and sell out hoping to buy back in. MMs know this and play on it. Look at the short movements around results. In many ways, investors control the share price more than management.
In summary, what do you actually want them to say (that isn't repeating what they have already said, is actually without the power of any company's management to say and actually has meaningful substance)?
The last secondary market sale implies a $1.7bn total award for those investors to even break even. BUR expects share to be about 40% of any award, net of expenses.
Repsol's settlement would equate to 2.5bn (so $1bn due to BUR).
There's then Eton Park on top which has much less chance of failing on a technicality.
Also very possible that, in the event of a successful case, they'd sell any entitlement at a discount to monetize it quickly. The $350m award won against ARG in the Aerolineas case in 2017 was sold on for $107m if I recall correctly. They were probably a bit more cash hungry to reinvest back then but it's still a very real possibility to eliminate default risk etc, end the saga and compound it by reinvesting.
If you have a company with a better looking PE and with a (smoothed) growth profile of BUR, can you please share... I want in!!!!
It's a good point on the interest. Not that it bothers ARG... normally it should encourage defendants not to unnessarily delay and reduce messing around in court. It's a shame ARG pays much higher interest on its other debt as that's making it have exactly the opposite effect.
From what I've seen, under NY law plaintiffs are only entitled to simple interest, not compound. I've seen cases where compound has been requested but the judge has denied it.
Alivib: Yes, with the wonderful gift of hindslight you *could*. I'm sure plenty of people do it.
Ok... clever analysts/fund managers?? Going to have to agree to disagree there! For instance, if you look at HL's explanation why they sold out of BUR it's pretty clear they didn't remotely understand it when they bought it nor when they sold it. Literature is also repleat with dozens of reasons why IIs take the easy road and jump on bandwagons far too late. Even Terry Smith (founder of Fundsmith!) has commented on it in an article I read recently.
My theory (and only a theory) is that BUR currently might have a little too much stigma for new IIs and they're probably still being cautious. History would suggest that won't last for ever though and *if* BUR continues to post more good results and YPF is out of the way, maybe a load will try to jump on. Another of my favourite investment quotes is something along the lines of "when you can see that there's a bandwagon, it's already too late to jump on it"...
Just my opinions of course and DYOR!
Slushy: Yes, the pro-government Argentine press are doing all they can to put pressure on and claim how bad this will all be for BUR if it goes wrong. They're not afraid of distorting the truth to do so either. You're just echoing them really. If you take a good long look over this thread and others (like the ADVFN) one you'll see how LTH generally regard it as immaterial and some good, in depth explanations why. It's only a factor if you're looking for a quick, risk free, big rise then exit (which obviously doesn't exist for any stock).
Time.Will.Tell: Yes, discovery has definitely been extended - Preska definitely granted the ARG request for that yesterday. However, I'm pretty sure everything else therefore shifts as well - it's all sequential. It was definitely originally in June - I've got that noted from the original timeline from the court filings. Then when she granted the extension in Dec I thought it pushed it back to Sept. Another 90 would mean Dec. Not seen that confirmed except in dodgy argentine press. Either way it's only a few weeks here and there... nothing in the big picture!
Alavib: If you look at trades on some days like that you see periods when there's really aggressive selling in a concentrated period. That happened last week really noticably (Monday?) - if you looked at the trades is was almost entirely bots and the price went down about 40p in just a few minutes. It then crept back really slowly over the day. The following day it came out a short had reduced and it all made sense.
I think basically confidence is still a bit low and currently there simply isn't the demand to mop up quickly enough when there's hard selling. If all the rapid fire sells come in a short period, doesn't really matter if supply and demand and more matched at the lower prices - the damage is all done in that short, hard selling period.
That's just my reading on it but it's not really my thing... I don't like relying on someone else to do what I expect them to with something I believe to be so undervalued... if they don't and I've sold, I'm screwed and miss all the upside for the sake of trying to grab a few extra percent (happened to me previously and I learnt my lesson)...
Are you sure it's not Nov/Dec for the trial? I thought Dec now and just seen Nov/Dec quoted in an Ambito article (although they're notoriously bad for getting details wrong and have a massive bias towards the ARG gov).
Jane: Again, totally unfounded and perhaps a little self centred. I was not referring to you at all. I was referring to the very imbalanced style of writing and the type of reports frequently found in the media (like the FT) desperate for attention grabbing headlines but whose reports are so ill-researched they claim such nonsense as BUR are in litigation with Abramovich.
You also see them here around key moments where shorters are trying to artificially depress the share price, normally from accounts making their first post. I have every right to flag the possibility that the post could potentially be of that nature.
Now, if you'd like to stop insulting me and discuss the company?
I actually found your first post on YPF decent and it poses a number of good questions. I've looked at the Peterson case a lot and there are definitely grey areas. I did not respond to your post because I do not know answers with any certainty. Perhaps one I would question is the basis on which you think there might be contractual implications that would cause BUR to have to refund monies already received? Surely BUR (as lawyers) wouldn't enter an agreement where the buyer gained all the upside if things go according to plan but had to give a refund if they did not? It's possible but isn't it like expecting your money back if your lottery ticket doesn't win?
I'm fully aware that there are grey areas in the Eskinazi saga and that's why in my response I said I'd done some EV calculations and am personally more than happy with the risks based on the potential upsides and downsides, both of which exist.
Grow up?? I ask because you seem to have taken personal offence at my direct response to a specific post under someone else's name. I have not insulted or belittled anyone. However, in your message you're happy to throw around totally disproportionate insults like "your arrogant way of belittling the opinions of others" and "others seemingly of your mind are really incapable of reading properly" whilst complaining about someone else supposed inappropriate behaviour?? I'm not going to waste time responding further to you on that point but I'm more than happy to discuss the company and it's strengths/weaknesses with anybody. I'm also happy for you to correct any inaccuracies you feel there have been in my own posts about the company. If I misunderstand something obviously I'd like to know.
Jane: Are you also slushycat? I've actually read a number of your posts (made under the name janebolacha) with interest. You make some good, thought provoking arguments. I'm all for healthy discussion of pros and cons. In fact I'd love if the chat was about that and how, for instance, to best value the company. Then everyone could become more informed rather than endless talking about short term price movements and what caused them. Everyone is entitled to an opinion but when it's based on zero fact and zero research whatsoever I'll call it out. I'm more than happy for anyone to do the same about anything I post.