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magazineBurford Capital enjoys 489% return
Burford Capital (BUR:AIM) 955p
Gain to date: 30.1%
Original entry point: Buy at 734p, 9 March 2017
Litigation finance provider Burford Capital (BUR:AIM) continues to prove a winning selection.
As a reminder, Burford is the leading operator in this niche space, providing funding for law suits in return for a share of any compensation award.
The limited visibility on earnings is mitigated by an excellent track record. The company does not have to wait until a case is decided to make money from the cases it is financing.
On 13 June the company reported the $66m sale of a further 15% interest in Petersen V Argentina. The litigation concerns Spanish investment group Petersen which faced insolvency after the Argentine government summarily renationalised oil company YPF.
According to broker Liberum, the company’s return on invested capital from this case to date, factoring in a previous sale of 10% of the case; is an eye-watering 489%.
It initially invested just $18m and has since recouped $106m for 25% of its stake. Liberum reckons it could get a windfall of more than $1bn when the case concludes.
We remain positive on the shares. Keep buying. (TS)
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