Member Info for Shakx7

It is off the back of the potential spacex IPO. The media is suggesting a valuation in excess of 1 trillion. Baillie Gifford currently value Spacex at 350bn I believe which would mean that should that materialise then they are looking at an increase of ~200%. Given that Spacex accounts for around 7% of NAV then that would be meaningful.

EWI has also seen a jump off the news due to 11% exposure.

I wonder if part of the issue could lie in being unable to satisfy the investment criteria of most actively managed funds.

Whilst we trade on low valuation multiples and are growing at the same time. Most value managers will lean towards companies that pay a reasonable dividend. At the same time we also fail to satisfy the often strict criteria of most quality growth fund managers who typically seek companies with low debt and more consistent and predictable earnings growth than we can offer. The lumpy nature of our returns is undesirable for these managers and many of them will filter us out before even considering the wider picture.

That leaves us with trying to appeal to the more 'speculative' growth funds such as those managed by Baillie Gifford, whom are already an investor. This particular theme is less common however.

I'm not sure what will change to enable us to appeal more to either of camp as the nature of our model will always lend to being lumpy and I don't see management wanting to pay a substantially higher dividend of say 3, 4 or 5%.

I assume joining the Russell 2000 index should help as passive funds become forced buyers but wouldn't claim to have an idea to what extent nor does it address the long term issue of whether Bur can consistently beat the market rather than become part of the market.

I'd welcome any thoughts...

I really rate Blue Whale and manager Stephen Yiu. However I see the strategies as very different and so SMT makes up ~15% of portfolio and Blue whale ~10%.

Blue whale is very much 'quality growth' vs SMT which is Concept growth. SMT seeks that 1 in 100 revolutionary idea to change the world. Blue Whale is fundamentals driven.

I think the best comparator to Blue Whale is Fundsmith and Stephen would probably agree. Stephen is a younger, hungrier and probably more motivated version of Terry Smith who is nearing the end of his career. Whilst the fund is slightly more volatile than Fundsmith I am encouraged by Blue Whale.

Very different animal to SMT however

Does anybody know the reason for increasing the quantity of shares?

Whether or not its a small quantity, perhaps the market worries that if Bur are willing to use dilution now, might they dilute my stake further in future?

Must say, I'm a little annoyed dilution has been used, but I have no idea why and perhaps there is good reason? Either way I'm a long term investor and still believe in the potential, so I'll be holding.

Hi, I'm trying to pick through the results but I still can't work out how we reached zero profit despite all the growth in most other metrics.

Does anybody have a simpler (less jargon filled) way of summarising why our costs increased so substantially that it completely wiped out our profit in a quarter where the top line was actually pretty strong?

I'm sure there possibly is a reasonable explanation but I don't feel it's been communicated well and so i can see how it's easy for the market to conclude that burford perhaps isn't a profitable business model.

I've just noticed Burford is now the no.1 holding in the Baillie Gifford British smaller Co's fund at 7.9%. Nice to see some big players taking a real interest in the company.

I think BG have held a position for some time now but I believe it was approx 2% of the fund last year so they must have made a few top ups.

Hopefully we see a few more large asset managers taking an interest, particularly those in the US. If you can start to get backing from the likes of JPM etc. then the attention that Burford draws may start to snowball.

I wonder if somebody more clued up than I could please clarify the deadline for an expected verdict.

I'm sure we were all hoping to have heard something by now. However thinking back I believe I read somewhere that Preska had 3 months from 23rd June to reach her final decision. In which case, we should be hearing something on the verdict in the next 3 weeks. Is that correct? Or does Preska have more flexibility on time than I am factoring in?

I appreciate we have seen a lot of interesting and rather impressive methods of attempting to valuate what we can all agree has become a rather complex business model. However I wanted to propose a far more simplistic method of determining a very rough valuation.

We are repeatedly reminded that we maintain a consistent IRR of 30%. So assuming that we remain more or less at that figure going forward, would it not be reasonable in any given FY results to take the total deployments in that year, apply the 30% IRR and that would give you the expected earnings generated from the years deployments. Dividing that by the amount of shares in issue to gain the EPS and attaching the PE you feel is appropriate.

I might be wrong but would be interested to hear why or just hear other people point of views. Ultimately I appreciate cases conclude at different rates but if the IRR remains a constant then a drawn out case wouldn't impact on the earnings generated it would just impact on the value of those earnings being discounted by inflation.

For example: In 2021 deployments $841m
x 30% = $252.3m
/219,050,000 (shares in issue) = $1.15 EPS (or £0.88)
___________________________________________
2021 Deployments value = 88p share
Even on a PE ratio of 15 which is pretty average that would value Burford at £13.20 per share (excluding Peterson)

Lordload - Completely agree, nobody has a crystal ball so it is easy to say with hindsight. In this particular case I mentioned on this forum 25th Aug that I was hoping the holding would be trimmed as much of the growth was baked in. Granted next time I could just as easily be wrong but when a holding occupies close to 10% of the portfolio it is worth trimming simply so you have more scope to top up at a future date.

As most of us are long term holders, this will matter little in the grand scheme of things, I view it as just a missed opportunity rather than a problem, and may just buy more SMT as my method of topping up my Moderna exposure following fall.

With Moderna due a further double digit fall again today I now think Moderna is looking like a good position to add to as I believe in it's long term opportunity. However I am a little disappointed the fund managers didn't trim their holding in the 3 months between August - October when the SP was 350+.

Doing so would have given us more scope to top up at lower levels should a retrace in the SP (like this week) have occured. Yes, you could say "well what if moderna grew further" but it became clear that around the 400 mark much of the growth had been baked in and so trimming the position to even 5% of the portfolio would have allowed them to deploy capital into their other holdings that hadn't already realised a vast amount of their future potential.

I suspect Moderna could surpass 400 again in the next 5 years so from here it seems a hold, but was it likely to double again over 5 years from the 400 mark? Just seems a missed opportunity to not trade on the stocks that are as volatile as this.

Can't be too disappointed though, their picks are still excellent, so perhaps their time is spent on finding new opportunities rather than trading existing.

Any news on what has sparked todays 6% drop? We are used to some volatility with this SP but it's been a while since we had a 6% fall in a single session. Looking like a decent entry point at 750p but I'd want to know I'm not missing something news wise.

Just to add something to those who have said they also follow Fundsmith closely (as I do). Another to research in the OEIC space is Blue Whale Growth, which although newer than Fundsmith, it has outperformed since inception. The manager has a very similar style to Terry but has a more adventurous mind set (in my opinion) similar to SMT. It is certainly more high growth focussed and riskier than Fundsmith, but I've been very satisfied with the managers way of thinking and the portfolio he maintains so far.

Does anybody know whether that means they topped up on Tencent during the recent sale or do we believe 4.1% simply represents the partial recovery in its share price?

I think earlier in the year we were at about 5.5% for Tencent but that was when the SP was HKD 600+

I've been looking to invest in a copper miner as I buy into the demand story as we embrace a move to EV's and become more reliant upon electricity. Having compared a few copper miners Capstone, Lundin, CAM etc. I've identified ATYM as my preferred pick based on fundamentals and valuation so far and am contemplating an investment having first researched the company a couple of years ago.

However my single major concern from my (somewhat amateurish) analysis is that I have spotted a lot of director selling on the stock vs no buys. Could anyone that follows this stock more closely than I offer any justification as to why that might be?

I realise the share price has gained a lot in the last year or so and maybe it has prompted some profit taking from directors, however with a forward P/E of a ridiculous 4.3 surely that is a ludicrous valuation to sell your holding. So I am concerned that the directors may know some potential flaw ahead that we do not?

We are all aware by now of how complex this particular company is to assess, which is certainly not helped by the lumpy nature of the returns. The one constant we do have is a 30% IRR which has remained consistent over at least the last 5 years.

So taking that, I was trying to work out how to apply that 30% IRR figure to Burford's current position to workout a projected annual sales. Can anyone assist me on what metric that 30% should be applied to? Would that be current portfolio or on deployments this year.

I realise this is very simplistic and in any year a different amount of cases will reach conclusion, however I figure this could give me a rough average for us to project a future trajectory of the company.

LordLoad - Yes I am hoping to locate the same information as while I trsut the fund managers to make the right choices for us, it will help me sleep at night if I know the team are actively capitalising on holdings that increase so astronomically in a short space of time. If they haven't I'm sure they have their reasons.

On the full portfolio valuation I can see the quantity of Moderna shares were 6,808,129 as of June 30th. So we will have to be patient and see if they produce another full portfolio valuation at the end of Q3 (i'm only assuming they produce these quarterly).

Alas_Smith - I agree ASML is a clear winner in the current market and am happy for it's sizeable inclusion within the portfolio as it's hard to envisage a scenario in the medium to longer term where semiconductors won't be in demand. As such the stock seems to be a relatively in-volatile stock for the level of growth it produces compared to the volatility levels of some of the other high growth inclusions.

Out of interest do you know who ASML's main competitors are? I don't know an awful lot about the sector, other than Taiwan Semiconductor and Samsung are two of the biggest providers of semiconductors, however their share prices haven't been as strong so wondered if those two companies offer something different to ASML or whether this is most likely just due to the Asia sell off?

Hi LordLoad, I've just been playing about with those numbers you kindly provided as I don't think this demonstrates Slater & co transacting on their Moderna or Tencent holdings.

Based on these values this seems to fall roughly in line with the share price movements rather than a tactical/intentional adjustment of shareholdings. I.e. if nothing else changed value in the portfolio I calculate on those numbers that Tencent would make up 4.1% through SP fall between May & July, the 0.1% difference is likely down to the fact that other holdings increased in value during this time.

So it doesn't look to me like SMT sold any Moderna or bought any Tencent shares by end of July.

I am keen to see if SMT would have trimmed their Moderna holding around 400 USD over the last few weeks in order to take advantage of topping up on the Alibaba & Tencent weakness, but that remains to be seen.

It seems there is a bit of a disconnect between the share price and that of gold and wondered if anyone has noticed the same? Normally you would expect the share price to gain by more than that of the price of the commodity as revenue increases but costs remain the same. However we seem to be underperforming the Gold rise.

For example on May 11th the Gold price was approx 1830p and the SP was 119.5p. Bring that forward a week and gold has soared to 1885p whilst the SP grows by <1% to 120.5p.

I'm interested to know what other peoples views are on why the share price doesn't appear to be growing proportionally? Are we just unattractive as an investment?

Can anyone clarify the situation on the dividends due in 2021 please.

I have read on Hargreaves Lansdown that a 3c (approx 2.2p) final is due to go Ex on May 20. However this is lower than in previous years. Did Centamin give such a reason for this?

Secondly I have seen on several sources such as market screener that the forecast yield is >6% in 2021. However with the final being closer to 2% is the interim in August likely to be a more substantial dividend or do you think we will see much less than 6% this year.

Thanks in advance.

I'm relatively new to this particular company however I watched the SP fall over the last few months as expected with the fall in gold price. We did see a minor rise last couple of weeks as gold rose. However I'm confused why we have had so little progress yesterday and even a fall today as the price of gold has risen both days. Can anybody shed some light on this relationship? Is there a particular reason why the SP of CEY doesn't seem to be rising accordingly?