Member Info for LunaNera

Hi Cmec11

I've performed a rather quick and dirty valuation and it currently sits at 400p fair value. Other ratios are also rather favourable, if not extraordinary. 33% ROC, 24% ROE and an operating margin of 26%. Add a price to Book value ratio at 1.17 and we have a very compelling value proposition.

Note that I don't have a position yet, but this one is definitively one I am currently researching.

B

It's been in slightly overbought territory for decent amount of time. At some stage, a pullback is rather normal.

Well stoodio, I must admit that luck was necessary for a play like that. I saw the recovery and the company literally printing money, but nobody expected the iPhone then and there was quite a lot of negativity surrounding the stock... My best decision was to not do anything at all. No sells, no trades, just kept it going and let the winnings compound.

I have the same honourable intentions with Sylvie.

Stoodio

It's certainly one of my best positions. My best one was AAPL at 6.40$ in 2005. Then they were already growing their cash at 30% each quarter. It ended up doing rather well for the next 10 years.

I wouldn't mind if Sylvie ends up beating that ;)

TBTT

You could not buy any because I backed up the truck and emptied the warehouse :D

J/K

When I valued the stock, I used very pessimistic figures, I always do. I also want a margin of safety (or a rate of return for you DCF affectionados out there) of 50%.

Not many stocks pass that filter. However, BUR did :)

Using the current ROIC for BUR, we are looking at a FV of 1900 and a buy under 950 (MOS of 50%). That would be the 'normal' scenario.

The model I used when I started building the position used 1300 as FV and a buy under 650 (using a ROIC of 2.75% only).

Interesting to see that others came up with similar ranges. That calculation takes about 3 minutes to do btw.

So, what does that mean? Unless the market goes bananas (again), the value proposition for this one is like no other on the exchanges. It has a solid balance sheet and is set to become a well established leader in the field.

Now is not the time to sell. In fact, it's still a good time to build the position further.

It's called market inefficiency, and I love them. There is no substitute for taking valuable assets at bargain prices. Let them sell below intrinsic value.... at their peril.

For as long as our society is still haunted by spectres of superstition, this will prevail.

I always hope for a drop in price for every security I'm interested in. If it drops far enough then it's time again to back up the truck and load up again.

www.sharesmagazine.co.uk/video/burford-capital-bur-christopher-p-bogart-ceo-5

Not that I read this publication, but the AI lobbed this onto my lap....

When browsing this board, the site occasionally shows INVESCO ads. The irony!

Looking forward to the ads from the newly registered Woodford venture.

Sirius,

It might not be Ben Graham that was wrong, it might be your interepretation that is different. Are you refrerring to this paragraph from the Intelligent Investor?

"The investor should have a definite selling policy for all his common stock commitments, corresponding to his buying techniques. Typically, he should set a reasonable profit objective on each purchase--say 50 to 100 per cent--and a maximum holding period for this objective to be realized--say, two to three years. Purchases not realizing the gain objective at the end of the holding period should be sold out at the market."

Doesn't quite say to sell at 50%, but to consider rebalancing your portfolio when objectives aren't met. I would certainly keep it running for as long as the business is sound. Compounding from such a discounted base can work wonders for a portfolio later on...

;)

Hi ffcmember,

I was not hinting at that at all. However, as markets panic (we've seen a little bit of this last year), a selloff usually impacts rather intact securities as well. I have no idea what impact a correction on US markets would have on UK stocks, but I'd imagine it could impact BUR since it is now listed there as well.

Thus said, I am actually not too worried about short term movements on prices, for as long as the business is intact and continues to build value, I am not that bothered. Mind you, my horizon is usually at least a decade unless something drastic happens in the field the business is operating in.

Did you have a look at the valuations on the US exchanges? Mad.

What I was simply pointing out is that

1 - BUR is an excellent value proposition for US investors
2 - There is a downside risk due to the US market being overvalued. This may have an impact on BUR short term.
3 - A corretion on the US exchanges might lead to BUR being priced rather attactively (again) in the future. Whether this will happen or not remains to be seen. But the odds are towards a rather sharp drop at some time in the future.
4 - Should a correction throw yet another opportunity in BUR being rather attractively priced, then it might be a good idea to have a cash reserve on hand (be prepared) in order to take advantage of market inefficiencies.

Pretty much investing 101. My musings were about the hugely overvalued US market. I would dare to go as far and claim that it is 50% over intrinsic value mostly.

In case you wonder what I would do if such a drop would manifest itself. I'd ride it out and consider doubling down at some point in time.

Looking at the S&P5000 or at the wilshire 5000 over GDP indexes, the signal a stunning overvaluation in the US markets.

This doesn't come as surprise given that an extra 3,000,000,000,000$ are now in circulation dye to a low interest monetary policy and dishonesty as to the real inflation rate.

Effectively, most companies in the US are now trading at hugely inflated prices.

This speculative frenzy makes shares like in Burford an excellent value proposition. Thus, I am not surprised that interest in Burford is growing (as it should).

Unfortunately, as markets correct this would imply am even stronger correction that we've seen last year. It will also imply that excellent businesses with rather favourable valuations will be on sale.

I don't know when this would happen though, but the likelyhood increases strongly over time. During the dot com bubble people pointed out for several years that markets were grosdly overvalued.

I have no idea when this will happen. Timing such events is rather difficult. However, rather than investing in overpriced markets I am now building a meaningful cash position in order to take advantage of the sale.

For those who missed last year's opportunity to take a position in this stock at incredibly low valuations... It may come again.

These high profile cases are how the company promotes itself and ensures media coverage. In this line of work integrity and discretion are essential. It's a shrewd strategy for promoting the company without having the BOD boasting about their case load. Think about it.

There is no bad publicity.

In the meantime, riding out the negativity has yielded double digit returns for me.

Value always prevails. I'm sure I keep staying long on this one for years to come. It should compund nicely going forward.

My estimates of intrinsic value are (conservatively) at 1300p. This should move upwards as the business establishes itself and keeps growing.

Patience.

Doesn't sound great... Mine arrived in Monday (iWeb)....

"The Group also holds mining rights for PGM projects and a chrome prospect in the Northern Limb of the Bushveld Complex."

To me this is where the potential expansion/growth could happen. Maybe they shed light on their plans in future updates/reports?

Amazing how much rubbish is parrotted without even understaning the implications.

Of course current results are not priced into the share price. Ben Davis (Librerum) is of the opinion that at 104p the shares pricing in only $4,000/oz rhodium. Arguably, it's not independend research (or qualifies as such), but it does give a rough ballpark on how ineficiently markets often operate.

And therein lies the opportunity indeed....

Isn't there a discussion group for that ticker?

I'm on the thrity end of cheap ass investing... So I'm with iWeb.

Nothing yet.... am I bothered? Not particularly. It'll go towards the cash pile reseved for the next market panic.

IMO the SP will go to 0.10p after the divis paid out. You should all sell your stock now.

Please do.

(J/K)

It didn't take long to figure out that the initial report on BUR by MW was a lot of porkie pies.

In a way I was grateful for his report since it allowed me to take a stake in an excellent company at a return I find acceptable (I found it a bit too expensive before).

Unfortunately for Carson, he has lost a lot of credibility with his recent mis-judgements and one might wonder as to the motivation of his 'writings'. Shame really, he used to do some good work turning the heat onto dodgy far eastern scams....

Hi GTX

Indeed, BUR is an interesting opportunity with rather good potential. There is a bit of a lag period since the returns from capital deployed trickles in over time. This "lumpy" aspect of the revenue stream can skew the picture slightly.

But not for very long....

Looking at the free cash flow (an important metric for many), this is the first time in five years that it is positive---and by a meaningful amount. This is certainly good news to me and an important strep towards realising it's quality potential.

Right now the shares are still trading below intrinsic value, so it's easy to understand why directors use their bonus to purchase their shares. I doubt that with a market cap of 1.5bn, this will move the needle much.

I keep repeating that eventually the market will realise BURs fair value, I just don't know when. From my experience, these moves can manifest rather sudden and brusk, which is why I prefer to just "ride it out" than attempt to dance in and out.

From my perspective, the less decisions an investor has to make the better.

Best N