OTCPK:BRFR.Y

Stock Analysis Report

Executive Summary

Burford Capital Limited, together with its subsidiaries, provides investment capital, investment management, financing, and risk solutions for the legal sector.

Rewards

Trading at 80.4% below its fair value

Earnings are forecast to grow 19.51% per year

Earnings grew by 36.1% over the past year

Risk Analysis

High level of non-cash earnings

Unstable dividend track record

Shareholders have been diluted in the past year



Snowflake Analysis

Very undervalued with high growth potential.


Similar Companies

Share Price & News

How has Burford Capital's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BRFR.Y has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

BRFR.Y

2.4%

US Capital Markets

2.0%

US Market


1 Year Return

n/a

BRFR.Y

19.0%

US Capital Markets

23.6%

US Market

Return vs Industry: Insufficient data to determine how BRFR.Y performed against the US Capital Markets industry.

Return vs Market: Insufficient data to determine how BRFR.Y performed against the US Market.


Shareholder returns

BRFR.YIndustryMarket
7 Day0%2.4%2.0%
30 Day0%3.8%3.9%
90 Day-4.7%15.0%12.0%
1 Yearn/a21.4%19.0%26.2%23.6%
3 Yearn/a48.9%40.5%53.2%43.3%
5 Yearn/a96.0%77.8%75.7%56.3%

Price Volatility Vs. Market

How volatile is Burford Capital's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Burford Capital undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BRFR.Y ($10.1) is trading below our estimate of fair value ($51.59)

Significantly Below Fair Value: BRFR.Y is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: BRFR.Y is good value based on its PE Ratio (5.2x) compared to the Capital Markets industry average (36.1x).

PE vs Market: BRFR.Y is good value based on its PE Ratio (5.2x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: BRFR.Y is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: BRFR.Y is good value based on its PB Ratio (1.3x) compared to the US Capital Markets industry average (6.6x).


Next Steps

Future Growth

How is Burford Capital forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

19.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BRFR.Y's forecast earnings growth (19.5% per year) is above the savings rate (1.7%).

Earnings vs Market: BRFR.Y's earnings (19.5% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: BRFR.Y's earnings are forecast to grow, but not significantly.

Revenue vs Market: BRFR.Y's revenue (24.1% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: BRFR.Y's revenue (24.1% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BRFR.Y's Return on Equity is forecast to be high in 3 years time (20.8%)


Next Steps

Past Performance

How has Burford Capital performed over the past 5 years?

43.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BRFR.Y has a high level of non-cash earnings.

Growing Profit Margin: BRFR.Y's current net profit margins (73.8%) are lower than last year (74.2%).


Past Earnings Growth Analysis

Earnings Trend: BRFR.Y's earnings have grown significantly by 43.8% per year over the past 5 years.

Accelerating Growth: BRFR.Y's earnings growth over the past year (36.1%) is below its 5-year average (43.8% per year).

Earnings vs Industry: BRFR.Y earnings growth over the past year (36.1%) exceeded the Capital Markets industry 20.6%.


Return on Equity

High ROE: BRFR.Y's Return on Equity (24.1%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Burford Capital's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: BRFR.Y has a low level of unsold assets or inventory.

Debt Coverage by Assets: BRFR.Y's debt is not covered by short term assets (assets are 0.8x debt).


Financial Institutions Analysis

Asset Level: BRFR.Y's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if BRFR.Y has a sufficient allowance for bad loans.

Low Risk Liabilities: BRFR.Y reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if BRFR.Y has an acceptable proportion of non-loan assets held.

Low Risk Deposits: BRFR.Y has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if BRFR.Y has an appropriate level of bad loans.


Next Steps

Dividend

What is Burford Capital's current dividend yield, its reliability and sustainability?

1.43%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years2.0%

Current dividend yield vs market & industry

Notable Dividend: BRFR.Y's dividend (1.43%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: BRFR.Y's dividend (1.37%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: BRFR.Y has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: BRFR.Y's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (7.4%), BRFR.Y's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BRFR.Y's dividends in 3 years are forecast to be thoroughly covered by earnings (6.5% payout ratio).


Next Steps

Management

What is the CEO of Burford Capital's salary, the management and board of directors tenure and is there insider trading?


CEO

Christopher Bogart (54yo)

0yrs

Tenure

0

Mr. Christopher P. Bogart is a Co-founder of Burford Capital LLC and serves as its Chief Executive Officer. Mr. Bogart serves as the Chief Executive Officer of Burford Capital PLC and Burford Capital Ltd.  ...


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.7%.


Management Team

  • Christopher Bogart (54yo)

    Chief Executive Officer

    • David Perla

      Co-Chief Operating Officer

      • Jonathan Molot

        Chief Investment Officer

        • Rob Bailhache

          Head of Investor Relations

          • Adam Gerchen

            President

            • Tenure: 3.1yrs
          • Mark Klein

            General Counsel & Chief Administrative Officer

            • Aviva Will

              Co-Chief Operating Officer

              • Daniel Hall

                Co-Founder

                • Jim Kilman (57yo)

                  Chief Financial Officer

                  • Charles Utley

                    Chief Accounting Officer

                    • Tenure: 1.9yrs

                  Board Members

                  • Peter Middleton (85yo)

                    Chairman of the Board

                    • Hugh Wilson (71yo)

                      Vice Chairman

                      • Charles Kennedy Parkinson (65yo)

                        Independent Director

                        • David Lowe (83yo)

                          Independent Director

                          Company Information

                          Burford Capital Limited's company bio, employee growth, exchange listings and data sources


                          Key Information

                          • Name: Burford Capital Limited
                          • Ticker: BRFR.Y
                          • Exchange: OTCPK
                          • Founded: 2009
                          • Industry: Asset Management and Custody Banks
                          • Sector: Diversified Financials
                          • Market Cap: UK£1.468b
                          • Listing Market Cap: UK£1.913b
                          • Shares outstanding: 218.65m
                          • Website: https://www.burfordcapital.com

                          Location

                          • Burford Capital Limited
                          • Regency Court
                          • Glategny Esplanade
                          • St Peter Port
                          • GY1 1WW
                          • Guernsey

                          Listings

                          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
                          BURAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPOct 2009
                          9BFDB (Deutsche Boerse AG)YesOrdinary SharesDEEUROct 2009
                          BRFR.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDOct 2009
                          BRFR.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDNov 2017

                          Biography

                          Burford Capital Limited, together with its subsidiaries, provides investment capital, investment management, financing, and risk solutions for the legal sector. It operates in four segments: Investments, Investment Management, Litigation Insurance, and New Initiatives. The company offers law firm and business solutions, including commercial litigation finance, portfolio and complex financing, risk management, asset recovery, international arbitration, insolvency and bankruptcy, competition and antitrust, intellectual property, and post-settlement and monetization solutions, as well as legal finance, equity, and advisory services. It operates in North America, Europe, South America, Asia, and internationally. The company was founded in 2009 and is based in St Peter Port, Guernsey. 


                          Company Analysis and Financial Data Status

                          All financial data provided by Standard & Poor's Capital IQ.
                          DataLast Updated (UTC time)
                          Company Analysis2020/01/19 00:47
                          End of Day Share Price2019/12/12 00:00
                          Earnings2019/06/30
                          Annual Earnings2018/12/31


                          Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.