Is Burford Capital’s (BUR) Bright Future, Uncertain?

Alphyn Capital Management, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A net return of 17.2% was recorded by the fund for the Q4 of 2020, above its S&P 500 benchmark that returned 11.7%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.

Alphyn Capital Management, in their Q4 2020 Investor Letter said that they maintained their position in Burford Capital Limited (NYSE: BUR) and stated that the company was subjected to a short attack last 2019. Burford Capital Limited is a finance service company that currently has a $1.8 billion market cap. For the past 3 months, BUR delivered a -3.78% return and settled at $8.39 per share at the closing of January 27th.

Here is what Alphyn Capital Management has to say about Burford Capital Limited in their investor letter:

“Positions with an average weight over 1% of the portfolio throughout the quarter includes Burford Capital Ltd. Burford, a litigation company, was subjected to a short attack in August 2019, which alleged the company fudges its accounting by dishonestly inflating the fair value of cases it has financed on its balance sheet. In response, Burford management released a large amount of additional financial information to give investors much more visibility into its accounting. Then on October 19th of this year, Burford listed and began trading on the NYSE. This is significant because governance standards are higher on the NYSE than on London’s AIM. Moreover, the management team is now exposed to potential criminal liability should there be any accounting fraud, to which they were previously not exposed. While NYSE listing alone is not a guarantee (as Enron and other case studies show), management’s willingness to list on the NYSE while under intense investor scrutiny signals probity to the market.”

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BUR delivered a -0.36% return in the past 12 months. Our calculations show that Burford Capital Limited (NYSE: BUR) does not belong in our list of the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.