Small Cap Value Report (Mon 12 August 2019) - BUR, TCG, ANG, GOAL, STAF

Monday, Aug 12 2019 by

Morning folks,

Burford news keeps rumbling on.

At the same time, there are a lot of interesting macro stories at present. And there's also some small-cap news to look at (which is supposed to be my topic, after all!). 

Stories covered today:

Burford Capital (LON:BUR)

  • Share price: 748.5p (-12%)
  • No. of shares: 219 million
  • Market cap: £1,635 million

Evidence of market manipulation in Burford shares

There are softer stock market targets than a group of litigators, but that is exactly who Muddy Waters decided to pick a fight with. So far, Muddy Waters is winning.

In today's RNS, Burford claims that there is evidence of illegal market manipulation of its stock.

I don't know if that is true or not, but I do know a little bit about market mechanics. Burford explains to us today what "spoofing" and "layering" are, and says:

Spoofing and layering are both illegal and have resulted in criminal convictions in the past.  As an example, layering led to the 2010 "flash crash" when the Dow Jones Industrial Average fell 600 points in five minutes; the perpetrator was found guilty of fraud.

There are a few things I might say about that.

Firstly, the "Flash Crash" was indeed a disorderly event but I can't agree that it was all bad: it was a terrific buying opportunity for fundamental investors, for example. I remember reading about a fund manager who literally sprinted across his building to place his buy orders in the market as quickly as possible. For every seller, there was a buyer. Those who were focused on value did very well out of it, as they should!

Therefore, at the risk of repeating what I have already said about the short attack at Burford, let me highlight that Muddy Waters did not force anybody to sell their Burford shares.

Indeed, those who believe that Burford shares are worth £20 should be pleased that MW has created an opportunity to buy them for £7.50.

But lots of people don't think this way: they…

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All my own views. I am not regulated by the FSA. No advice.

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Burford Capital Limited is a Guernsey-based finance and investment management company focused on law. The Company's businesses include litigation finance and risk management, asset recovery and a range of legal finance and advisory activities. It provides investment capital, investment management, financing and risk solutions with a focus on the legal sector. Its segments include provision of investment capital in connection with the underlying asset value of claims; investment management activities; provision of litigation insurance; and exploration of new initiatives related to application of capital to the legal sector until such time as those initiatives mature into full fledged independent segments. Its provision of litigation insurance segment reflects the United Kingdom and Channel Islands litigation insurance activities. more »

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Thomas Cook Group plc is a holiday company. The Company's segments are United Kingdom, Continental Europe, Northern Europe and Airlines Germany. Its hotels and resort brands include Sentido, Sunprime, Sunwing, Sunconnect, Smartline and Casa Cook. It has airline operations in Belgium, Scandinavia and the United Kingdom. It has a fleet of over 90 aircraft under the Thomas Cook Airlines and Condor brands. It operates from approximately 20 source markets in Europe and China. Its Sentido brand has operations in Germany, Austria, Switzerland, Belgium, Hungary, Poland, Netherlands and Czech Republic. Its Smartline brand has operations in Germany, Austria, Switzerland, Belgium, Hungary, Poland, Netherlands and Czech Republic. Its Thomas Cook brand has operations in Germany, Austria, Switzerland, Belgium, Hungary, Poland and Netherlands. Its Sunprime Hotels brand has operations in Germany, Austria and Switzerland. Its Neckermann brand has operations in Germany and Austria, among others. more »

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Angling Direct plc is a United Kingdom-based fishing tackle retailer company. The Company is principally focused on selling fishing tackle products and related products through retail stores and also online via its own Website ( The Company’s product categories include reels, terminal tackle, rods, bait and additives and bivvies and shelters. The Company fishing tackles products, including capital items, consumables, luggage and clothing. Theses all fishing tackle products sells under its own brand Advanta. The Company operates approximately 15 retail stores. The Company has developed angling superstores. more »

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  Is LON:BUR fundamentally strong or weak? Find out More »

71 Comments on this Article show/hide all

Paul Scott 12th Aug 33 of 71

Hi Graham,

Very interesting thoughts on Burford, thanks.

I totally agree with your conclusion;

 If I was advising Burford, I would suggest that it stops talking about Muddy Waters, gets on with business as usual, and proves the shorters wrong through its results.

It was a mistake on Burford's part to issue today's RNS, I think, going on about market manipulation, and looks like it's been couter-productive, as the share price recovery has gone into reverse.

Last week it issued a prompt, and detailed rebuttal, plus a long & detailed conference call. That was perfectly adequate. They should have then drawn a line under it, saying, we've answered all the questions, now we're going to get on with running the business.

Sometimes less is more.

Regards, Paul.

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Nick Ray 12th Aug 34 of 71

In reply to post #503606

I got my data from

The column 'type' shows the largest trades as being CANC but the totals for the day which are similar to yours seem to add up all volume including CANC trades and the trade which has been  cancelled.

Happy to be corrected if the CANC trades do in fact count.

The trades greater than 100,000 for 2019-08-07 recorded on that site look like this. (I notice it does not have quite a lot of your trades. Probably MIFID2 strikes again. Or are you showing publication date rather than execution date?) But far and away the largest trades of the day are the 5M and 2M trades.

2019-08-07 13:46:032019-08-07 13:46:03476.65000480AIMXRM
2019-08-07 13:46:032019-08-07 13:46:03476.65000480CANCAIMXRM
2019-08-07 16:39:322019-08-07 16:39:31576.972000000AIMXRMPRIC
2019-08-07 16:39:322019-08-07 16:39:31576.972000000CANCAIMXRMPRIC
2019-08-07 16:40:302019-08-07 16:40:29576.972000000AIMXRMPRIC
2019-08-08 12:00:002019-08-07 16:55:27LRGS605981196AIMXRMTNCP

The various four-letter codes are explained here

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andyfwwrench 12th Aug 35 of 71

In reply to post #503571

If there were any momentum traders in £BUR they weren't very good ones. The share price had been falling since April, and before that did not at all cope with the market sell off during Q4 2018. It is dip buyers that were caught out. They thought reversion meant back to highs, not somewhere south towards the listing price.

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Paul Scott 12th Aug 36 of 71

I note that 4 people have given today's report a thumbs down, which is completely unjustified in my view.

Can I just say that, as a writer here myself, it's bloody annoying when people do that, and just de-motivates the writers. It's tantamount to saying that the writer has wasted their time & energy writing the report, because you think it's rubbish.

So thumbs-downers: If you want bland, middle of the road reports that don't offend anyone, we can do that instead?

I know it shouldn't matter, but it does - we're all human after all.


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dscollard 12th Aug 37 of 71

In reply to post #503626

Nick, I pay for my data , it's provided by the FTSE - LSE and comes straight from source including Level 2 and Lists/Quotes. These are execution dates.

ShareScope Pro provide this, they also update the EOD volume over the following days for unlit transactions and insti-insti deals : these will include trades reported later and off-book

Per my screen dump, there were 37,763 trades on the 7th

I don't use free data, it's often full of errors and omissions: I trade and use the data for trading, it's a cost of doing business but not one I take likely hence my response.

I pay to have some confidence in what I use, what I base my analysis and capital on and what I write about.

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sharw 12th Aug 38 of 71

On Thomas Cook (LON:TCG) Graham writes: "This stock is a bulletin board favourite, attracting hundreds of posts every day".

Looking at ADVFN boards TCG has had 15,670 posts since 12/8/18 while Burford Capital (LON:BUR) has 7,250 in the same period. By contrast the board of my best performing share has received 727 posts since the board was started in July 2006. All this confirms what Ed has said before and which you can view 6 minutes in here:

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HumourMe 12th Aug 39 of 71
I note that 4 people have given today's report a thumbs down, which is completely unjustified in my view.

I think there should only be  thumbs up and 'report'. There are many articles and posts that I think deserve a thumbs up and some of these are so good that it is the only constructive feedback I can give. If I disagree, I leave myself the option to construct a reasoned counter-argument, support someone elses or move on. Responding with a thumbs down is just saying "I'm grumpy", in my opinion (bring them on ;-) )

A well argued position, whether I agree with it or not, deserves respect. 

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Julianh 12th Aug 40 of 71


Thanks (to you and Paul)  for your detailed coverage of the £BUR saga. I found today’s comments interesting and in general persuasive except for one point. You say that the Burford share price fell so fast because investors do not know how to value Burford. You are right but this is also true to a greater or lesser extent for all stock market investments. We never really know what is going on underneath the bonnet and sometimes the directors don’t know either.  To take two examples:

£VLE is one of your favourite investments. The large amount of cash on the balance sheet is easy to value. The performance of the business depends entirely on the capability of the directors in selecting good companies to buy and turning them round successfully.  We have past history of successes but that is all

£BVXP is one of my favourites. Much of their royalty revenue is consistent and relatively easy to forecast. But we don’t know how much they will earn from their newish Troponin assay and neither do the directors. They too have to wait until Siemens give them the six monthly numbers. And investors have almost no idea of whether Bioventix will be successful in the development of new test ingredients or whether those ingredients will be adopted by one of the big medical testing businesses.

With very few exceptions, we never really know what a company is worth. So it is not surprising that investors take flight quickly. 

In the game of chess both players can know everything about the position. They use their ability to make a choice for their next move. Investing is not like chess.

In the game of contract bridge players can only see their own hand (and dummy). But the players do know the contents of the pack and so can make sensible judgements of what the other hands might hold. Investing is also not like contract bridge

In investing we don’t even know how many cards there are in the pack or of what denomination. Things can be going on that we are not even wondering about. 

“this gun’s for hire

“Even if we’re just dancing in the dark” (Bruce Springsteen)

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purpleski 12th Aug 41 of 71

In reply to post #503556

Thanks Graham. Just replying to test stock tickers because the £ sign followed by epic code does not seem to be working when I post and doesn’t for others but seems ok for most.  Michael  


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Richard Goodwin 12th Aug 42 of 71

In reply to post #503476

But not in the accounts of property companies, only in those firms for which owning property is not the main activity. Clearly legal cases are Burford's main activity.

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grb 12th Aug 43 of 71

In reply to post #503636

Paul - I suspect these may not be intentional. I've only just found where the thumb up/down function is in the new version of Stockopedia, and it's not at all obvious what it is - it looks more like a scrolling function.

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shanklin100 12th Aug 44 of 71

In reply to post #503676

Yes, Inland Homes (LON:INL) are specifically choosing to extend their current financial year so that their forthcoming full year results can reflect two successful major planning applications, so that their NAV will be uplifted through the revaluation of these land assets.

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tjh490 12th Aug 45 of 71

In reply to post #503636

Just a thought - and possibly wrong - but, as I went to Thumbs-Up you to restore a bit of sense, I realised that on my mobile screen my thumb is dangerously near the arrows when scrolling. It's possible that at least some of the down voters didn't mean to vote and, indeed, don't realise they did.

Regardless, thank you for your insights Paul. They are much appreciated.

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Graham Neary 12th Aug 46 of 71

In reply to post #503661

Hi Julianh, thanks for the comment!

It's true that there is uncertainty around the value of every company - great point. But I do think that some companies are much more uncertain than others. Where it's possible to trade options on companies, we can see this uncertainty numerically expressed through the stock's implied volatility. Some stocks have low IV while others have high IV, due to the greater uncertainty around their fundamental value.

When you have a company with 1) extreme uncertainty around its value and 2) a fragile shareholder base, then you have a prime target for a short attack, because you have a lot of weak hands.

By contrast, attacking a company like Volvere where the holders have a very good idea about its NAV and there aren't many shares floating around would be a waste of energy by a bear raider.

Hope this makes sense - thanks for your input.


(disc. long VLE)

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dscollard 12th Aug 47 of 71
Would you be surprised to learn that on 2019-08-07 the "true" volume (shown on your graph as being about 30M) was in fact only about 6M?

There were a large number of CANC trades - which all get included in plots like the one you have shown. In particular at 13:46:03 on 2019-08-07 there was a 5M order which was immediately cancelled. It is then counted as 10M worth of volume (the trade plus its CANC trade)!

Just on thumbs up and  down, confirmation biases and, and:    Nick Ray's comment above while possibly well meaning on the "true" volume of data in the plot I posted was actually based on free data that was incomplete and so gave an incomplete number 

 Mine was based on the official data from the LSE and is correct

The wrong answer gets 11 thumbs up, the right one gets 2

There is little point in writing anything of fact or analysis  grounded in evidence if readers decide which answer they "like" best  because it fits a bias or a convenient narrative.

That's not just demotivating, it's insane.  

EDIT: and Nick has subsequently very kindly pointed this out too: thank you Nick

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Nick Ray 12th Aug 48 of 71

In reply to post #503641

Hi dscollard - yes, it looks like my source has dropped a lot of trades.

Sorry if I offended you. That wasn't intended. I was just in a bit of shock that it looked like over 50% of the stated volume had been cancelled. On your data I think it is still near to 25% though.

Should also make clear that these are transactions which made it into the log so presumably not the kind that Burford Capital (LON:BUR) were drawing attention to.

On a related note, the quality of trade info from free sources has become very poor since MIFID2 came in. Google used to provide real-time trade reports. They became patchy and then Google stopped doing it altogether. Moneyam's trade data also became unreliable and they never did fully sort it out before they ceased to be. What other sources remain seem to be failing to see a significant number of transactions. All of which seems to be exactly the opposite of the stated intention of MIFID2.

So finally I quite agree with a comment higher up that Burford Capital (LON:BUR) have made a mistake to keep pulling on this thread. Every time they mention it they are reigniting concerns which investors thought were dealt with.

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dscollard 12th Aug 49 of 71

In reply to post #503711

nick it didn't offend, I take a lot of care in my analysis: it's reputational.No hard feelings, just good objective bashing of fact

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timarr 12th Aug 50 of 71

MW have responded to the allegation of manipulation:

The accusation by of “manipulation” by HFT-type trading has zero to do with MW. We have absolutely no trading capability to do that. Such accusation is preposterous. If BUR wants to bring that to court, we will smack BUR and any supposed expert down hard.

Which is at least unequivocable, I suppose.

Their previous tweet goes into some detail about whether the CEO / CFO relationship had been disclosed. For those with an interest well worth keeping an eye on their Twitter feed.


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Redtop 12th Aug 51 of 71

thanks Paul, Great commentary on #BUR.  Many thanks

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Redtop 12th Aug 52 of 71

Apologies, should have said great commentary Graham. Many thanks for your comments on #BUR

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 Are LON:BUR's fundamentals sound as an investment? Find out More »

About Graham Neary

Graham Neary

Full-time investor and independent analyst. Editor at Cube.Investments, small-cap writer at Stockopedia. Previously a fixed income analyst in the City and institutional fund manager. I'm a CFA charterholder and have the Investment Management Certificate and STA Diploma in Technical Analysis for good measure. When I'm not talking about finance, I enjoy recreational poker, chess and Mandarin Chinese. more »


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