OBL - Omni Bridgeway

[JTLP]

Re: IMF - IMF (Australia)

IMF due to pay out a 5 cent interim divi on the 24th of March. This has been trending down since mid Jan and the recent half yearly accounts didn't look too flash for 2010.

So what's the go? Did the government decision affect them that much? They seem to have a pretty chocka book for 2011 and are aiming at over $2B in litigations. Pretty decent yield if they pay out the Final divi like last year at 10 cents (over 10% grossed up!). Any ideas out there?

 

[So_Cynical]

Re: IMF - IMF (Australia)

I brought some IMF today at $1.345 ive been watching for a long time and after much uming and arhing, and a couple of failed attempts to low ball other stocks i finally settled on IMF.

My reasons for including IMF in my long term portfolio are more about what it isn't than what it is, and how it fills a gap in my 18 stock portfolio, if that makes any sense?...ill list some of the things i like about IMF.

• Unaffected by currency fluctuations.
• Unaffected by consumer sentiment.
• Unaffected by Market sentiment. (except of course in the extreme)
• Unlikely to be affected by changes in legislation.
• Unlikely to be affected by changes in technology.
• No debt.
• 43 mill cash (26% of market cap)
• Super simple structure/overheads.
• Market leader/great record of success.

IMF is a simple business dealing with complex issues and having great success, and they have proven in the past that when successful they are more than happy to pass that on to shareholders via dividends, now its the nature of there business that there revenue flow will be intermittent and i think anyone investing with IMF for the long term needs to except that.

Personally i think the ups and downs in revenue and thus dividends will offer many in and out/buy and build opportunity's..and that suits me just fine, 2 year chart below showing lots of (post GFC) support at around this level.
~

 

[JTLP]

Re: IMF - IMF (Australia)

I brought some IMF today at $1.345 ive been watching for a long time and after much uming and arhing, and a couple of failed attempts to low ball other stocks i finally settled on IMF.

My reasons for including IMF in my long term portfolio are more about what it isn't than what it is, and how it fills a gap in my 18 stock portfolio, if that makes any sense?...ill list some of the things i like about IMF.

• Unaffected by currency fluctuations.
• Unaffected by consumer sentiment.
• Unaffected by Market sentiment. (except of course in the extreme)
• Unlikely to be affected by changes in legislation.
• Unlikely to be affected by changes in technology.
• No debt.
• 43 mill cash (26% of market cap)
• Super simple structure/overheads.
• Market leader/great record of success.

IMF is a simple business dealing with complex issues and having great success, and they have proven in the past that when successful they are more than happy to pass that on to shareholders via dividends, now its the nature of there business that there revenue flow will be intermittent and i think anyone investing with IMF for the long term needs to except that.

Personally i think the ups and downs in revenue and thus dividends will offer many in and out/buy and build opportunity's..and that suits me just fine, 2 year chart below showing lots of (post GFC) support at around this level.
~

Must have read my mind...I too have been looking at IMF.

They look to fluctuate between the low 1.30's to 1.50's - so as you said (using your strategy) an easy buy and build strategy for ~10% gains.

They have a pretty sizeable divvie as well if it stays consistent...and with some pretty big cases on hand (if successful) should be a nice year.

 

[So_Cynical]

Re: IMF - IMF (Australia)

I brought some IMF today at $1.345

I took 85% of my money out of IMF today at $1.49 a 10% profit in 4 weeks is acceptable due to my new position sizing policy...i decided 2 months ago to increase my position size by 40% when entering trades so i could take advantage of smaller % SP moves, and its paid off with IMF, unfortunately hasn't gone as well with BPT

I like the idea of investing with lawyers and may well add another legal stock to my portfolio...i look forward to buying more IMF the next time it dips below $1.36

 

[So_Cynical]

Re: IMF - IMF (Australia)

i look forward to buying more IMF the next time it dips below $1.36

Or when IMF decide to offer discounted shares through a capitol raising of some sort, personally i like rights issues i would reckon the issue price would have to be around 1.32 > 1.37 :dunno:

IMF (Australia) Ltd requested a trading halt on October 28, 2010 pending an announcement by the company about a capital raising. Trading will resume on Monday, November 1, or on an earlier announcement.

http://www.businessspectator.com.au/bs.nsf/Article/IMF-in-trading-halt-AMV8G!OpenDocument&Click=

 

[JTLP]

Re: IMF - IMF (Australia)

Or when IMF decide to offer discounted shares through a capitol raising of some sort, personally i like rights issues i would reckon the issue price would have to be around 1.32 > 1.37 :dunno:



http://www.businessspectator.com.au/bs.nsf/Article/IMF-in-trading-halt-AMV8G!OpenDocument&Click=

That's odd. They were doing share buybacks and paying out quite a high divvie...why raise capital? Unless they're not winning cases and getting no fees?

 

[So_Cynical]

Re: IMF - IMF (Australia)

IMF raising about 40 mill to fund the growth of there case portfolio, via a non-renounceable 1 for 10 rights issue of convertible (ASX listed/quoted) notes at $1.65 per note, the notes are good for 4 years and pay 10.25% :nuts: with a record date of 10th November there's still some time for non IMF holders to buy in if 10.25% floats ya boat....prospectus link below.

http://www.imf.com.au/ASPX/AUSNZ/DownloadFile.aspx?file=IMF_8843_Prospectus_v12w.pdf

 

[So_Cynical]

Re: IMF - IMF (Australia)

The IMFG convertible notes hit the market today and traded at about 5 to 6% higher than the issue price...im keen to add to my small parcel and i live in hope of buying in at just under the issue price as soon as there is some panic selling. in this market i may not have to wait long.

 

[So_Cynical]

Re: IMF - IMF (Australia)

IMF half year report out today...on the back of some recent settlements in favour of IMF and there clients....have a look at these numbers.

Half on corresponding half.

• Total income from continuing operations up 76%
• Net profit attributable to members up 89%
• Diluted EPS up over 90%
• Interim dividend up 100%
• Cash and equivalents 69 mill
• Total liability's (less convertible notes) 21 mill
• Interim dividend 10 cents per share fully franked

I'm in love :1luvu: my buy in price $1.345 gross return of what 9.7% or so....and yet another significant bottom brought.

http://www.imf.com.au/announcements/Half Year Report and Accounts - 31 Dec 10 - 22 Feb 11.pdf

 

[So_Cynical]

Re: IMF - IMF (Australia)

I brought a few more IMFG today ($1.795)...my whole IMFG position now yielding about 9.6% PA
Happy to hold and get the quarterly divis for the foreseeable future.

 

[So_Cynical]

Re: IMF - IMF (Australia)

(23rd-September-2010) I brought some IMF today at $1.345 ive been watching for a long time and after much uming and arhing, and a couple of failed attempts to low ball other stocks i finally settled on IMF.

(20th-October-2010) I took 85% of my money out of IMF today at $1.49 a 10% profit in 4 weeks is acceptable due to my new position sizing policy...i decided 2 months ago to increase my position size by 40% when entering trades so i could take advantage of smaller % SP moves, and its paid off with IMF, unfortunately hasn't gone as well with BPT

I like the idea of investing with lawyers and may well add another legal stock to my portfolio...i look forward to buying more IMF the next time it dips below $1.36

And as it turns out, true to my word (above) i brought some IMF for my super fund today at 1.35...buying for exactly the same reasons as last time, except this time im buying as a successful long term IMF holder....and with the knowledge that IMF has already delivered on the potential of 14 months ago, and is now a substantially better company/business.
~

 

[robusta]

Re: IMF - IMF (Australia)

My reasons for including IMF in my long term portfolio are more about what it isn't than what it is, and how it fills a gap in my 18 stock portfolio, if that makes any sense?...ill list some of the things i like about IMF.

• Unaffected by currency fluctuations.
• Unaffected by consumer sentiment.
• Unaffected by Market sentiment. (except of course in the extreme)
• Unlikely to be affected by changes in legislation.
• Unlikely to be affected by changes in technology.
• No debt.
• 43 mill cash (26% of market cap)
• Super simple structure/overheads.
• Market leader/great record of success.

IMF is a simple business dealing with complex issues and having great success, and they have proven in the past that when successful they are more than happy to pass that on to shareholders via dividends, now its the nature of there business that there revenue flow will be intermittent and i think anyone investing with IMF for the long term needs to except that.

Personally i think the ups and downs in revenue and thus dividends will offer many in and out/buy and build opportunity's..and that suits me just fine, 2 year chart below showing lots of (post GFC) support at around this level.
~

I like the same things about IMF, I am looking to get in below $1.30 if possible.

Maybe a case looking weak may be the opportunity I am looking for.

http://www.theaustralian.com.au/bus...s-action-on-fees/story-e6frg9kx-1226214539468


The recent expansion into the US should provide growth.

http://news.gnom.es/pr/imf-australia-launches-bentham-capital-in-u-s

Not sure if IMF can hold spot in ASX300 due to lack of liquidity, my opportunity may come when/if the fund managers have to sell.

 

[So_Cynical]

Re: IMF - IMF (Australia)

I like the same things about IMF, I am looking to get in below $1.30 if possible.

Maybe a case looking weak may be the opportunity I am looking for.

http://www.theaustralian.com.au/bus...s-action-on-fees/story-e6frg9kx-1226214539468


The recent expansion into the US should provide growth.

http://news.gnom.es/pr/imf-australia-launches-bentham-capital-in-u-s

Not sure if IMF can hold spot in ASX300 due to lack of liquidity, my opportunity may come when/if the fund managers have to sell.

Sounds like a plan...im hopeful of having another opportunity for my personal portfolio too...i was surprised to see IMF in the ASX300 it really doesn't belong there, the MC and liquidity just isn't there.

 

[Ves]

Re: IMF - IMF (Australia)

I looked at this a while back and whilst the basic ratios all looked good, and the company itself has had solid profit growth for the past few years, I had too many reservations. I liked the idea that they wouldn't take on a case unless it made them $3 for every dollar that they spend on it.

The thing that turned me off whilst looking at its fundamentals was the fact that I cannot gaurantee how many cases they will win. They obviously cannot either. They can mitigate the risk by being very selective, but there is still judgment risk.

Look at the cash flow, for instance, you can see that profit is determined by how much of their case expenses they capitalise vs how many they put to P & L. Will they win the cases that they have capitalised? How do we know? It seems somehow easily to maniplulate profit in the near-term in the hope that case results are successful.

They also seem to be increasing their borrowing / debt levels (for expansion, I take it). The US market is massive by the way, big risk, big reward play. Interesting to see how they go. By their own words they have sucked all possible growth out of the Australian market. So this has to work for profit growth to continue.

They've only lost six (off the top of my head, sorry if not exact) in a decade, but what happens if this streak turns bad? It's all too hard to factor this in from a valuation perspective. It is a business heavily reliant on key personnel and the human factor (arguable for most businesses of course, but I think it is even more relevant in a company like this).

Low capital intensity is a big tick, but earnings have the potential to be very lumpy and hard to predict going forward. The CEO mentioned something about the "lack of gaurantee on contracts streaming to the company" in previous reports. This is a little worrying; no real problems thus far... but the future isn't always governed by the past.I think that this stock is a lot riskier than it seems on the surface.

 

[robusta]

Re: IMF - IMF (Australia)

Acorn capital seem to be selling down holding - maybe the price will be right for me soon to pick up some IMF.

 

[robusta]

Re: IMF - IMF (Australia)

Had my chance but hung out for a better price, one day........

 

[So_Cynical]

Re: IMF - IMF (Australia)

IMF had a good day today as news came thru that the Centro case is close to a conclusion with IMF to get a major share of the 150 million dollar settlement. with my other legal stock SGH (Slater & Gordon) sharing in the other 50 million of the settlement.

Lets hope the SP gets to 1.51 tomorrow so i can complete my first super trade.

http://www.pmflegal.com/blog/index....australian-investors-say-shareholder-lawyers/

 

[Nutmeg]

Re: IMF - IMF (Australia)

The thing that turned me off whilst looking at its fundamentals was the fact that I cannot gaurantee how many cases they will win. They obviously cannot either. They can mitigate the risk by being very selective, but there is still judgment risk.

The statement in bold is only partly true because the bulk of the cases that IMF fund do not go to trial. They settle. And they settle because the likelihood of which side of the dispute is going to win is usually fairly clear well before the commencement of the trial. I say this as a litigation lawyer myself, usually on the opposite side of the claims funded by IMF. For a corporate defendant, the prospect of a contested trial and a finding of liability will often compel settlement even where the claim is defensible. Thus, a plaintiff's claim may have only a 40% chance of success but that is often enough to compel a settlement on terms that give IMF a substantial return on its investment. This is because, ultimately, corporate defendants always stand to lose a lot more in a public trial in terms of costs and reputational damage than do individual plaintiffs.

Low capital intensity is a big tick, but earnings have the potential to be very lumpy and hard to predict going forward. The CEO mentioned something about the "lack of gaurantee on contracts streaming to the company" in previous reports. This is a little worrying; no real problems thus far... but the future isn't always governed by the past.I think that this stock is a lot riskier than it seems on the surface.

If the risk that you have in mind is lumpy earnings, then I agree that the stock has earnings risk. However, from what I have read of the IMF team, they are very prudent managers of IMF's working capital. Also, the nature of the business is incredibly scaleable and flexible as IMF does not have teams of lawyers and barristers standing around that need to be paid even when there are few claims worthy of funding. They are all outsourced. Thus, IMF can easily scale up to multimillion dollar claims in a way that is perfectly calibrated to the value of the claim.

Personally, I am interested in learning about the state of the US litigation funding market. The US is the most litigious nation in the world and yet I understand that litigation funding in the US not as mature as it is in Australia. I think that IMF's experience will give it a real competitive advantage here.

One last point: on the question of growth, the presence and availability of litigation funding must, in my view, bring forth an increase in litigation since a lot of claims that formerly were viable were not litigated due to lack of funding.

 

[Ves]

Re: IMF - IMF (Australia)

Nutmeg, thanks for clarifying those points. Good information.

I try not to buy into businesses with either lumpy cash flow or earnings. They are notoriously hard to value, especially if they seem to follow no particular earnings cycle. As a whole it is definitely outside of my circle of competence (as your reply shows).

The stock interests me though in the sense of its story (rather than as an investment), I follow it on and off, mainly out of interest to see how they go with their expansion.

I know a lot of people bought this as a high-yielding stock, but it isn't. Some times it will pay a good dividend, other times it will pay none (ie. last half).

 

[So_Cynical]

Re: IMF - IMF (Australia)

I try not to buy into businesses with either lumpy cash flow or earnings. They are notoriously hard to value, especially if they seem to follow no particular earnings cycle.

I know a lot of people bought this as a high-yielding stock, but it isn't. Some times it will pay a good dividend, other times it will pay none (ie. last half).

But it is a high yield stock..IMF has been paying divs for 5 years and has returned about 49 CPS gross over those 5 years...using the current SP of 1.38 that's an annual return of around 7.1% ~ the founders got their shares for 20 cents each, so a 240% + ROC for them.

Lots of good stocks have lumpy earning..small miners, the service company's infact any company dealing with contracted jobs...lumpy = opportunity.