Litigation funder. For example funding Australian ltigants against Lehman for GFC losses. http://stocknessmonster.com/news-item?S=IMF&E=ASX&N=758952 IMF price closed at $1.705 on Friday A placement and shareholder Purchase Plan (SPP) was announced Oct 2. Price was $1.70. Placement to raise $31m. SPP to raise $10m As announced Oct 30 SPP was slightly oversubscribed Part of the monies raised were to fund a redemption notice for the company's convertible notes. This would prompt noteholders to either convert the notes to shares at $1.65 or accept a refund of their investment at $1.65 face value per note. The remainder of the monies raised are intended to expand the US part of the business and probably to launch the business model in UK/Netherlands. As usual I jumped the gun and started buying @ 1.82. Then more @ 1.81, 1.80. Kept waiting for the price to be pushed down to the placement and SPP price of 1.70 but time dragged on and I lost patience. Eventually it happened. Now it's possible for the price to be pushed a little deeper as the noteholders who convert are getting their shares at 1.65 IMF's earnings are well known to be lumpy; hardly surprising as it a litigious leech that only engorges from a successful court suit or a settlement. If you average the ROE out over the more recent 7 years you get ROE of 23% with equity per share (book value) on a rising trend over those years. At a price of 1.70 the price/book value is a mild 1.7 Obviously it's a punt on the growth plans coming off Financial Years 2004 - 2013 Return on Equity (%) 6.90 -4.50 -1.70 12.80 25.50 32.50 16.40 26.20 38.50 11.00 Book Value ($) 0.33 0.40 0.42 0.41 0.56 0.54 0.60 0.71 0.91 1.02 At June 30, prior to October capital raising mentioned, the company had more cash than debt, although it has flagged that it will probably use some debt to boost litigation funding in its growth plans. The chart is still ambiguous to me. It could be rounding top forming with baseline at around 1.65, or it might be one of those dome things that Clive Maund talks about which is bullish on a break above. If the baseline of 1.65 breaks that would make target 1.30 conceivable. Shouldn't be all that long before direction becomes clear? IMF Weekly
Well almost a couple of months on and the bullish scenario is shaping so far - the price is well outside the dome thingy and support at about 1.65 has not been threatened. Missing is any surge of volume to add confidence. Reason I'm commenting now is the possibility that it is making a pennant in the short term (2nd chart daily). Pennant's getting a bit ragged last two days but hoping for a break upwards from that for continuation of uptrend http://stockcharts.com/school/doku...._analysis:chart_patterns:flag_pennant_continu 2 YEAR WEEKLY 3 MTH DAILY
Nope.... "Pennant's getting a bit ragged last two days but hoping for a break upwards from that for continuation of uptrend" Announced a partial win against ANZ over bank fees today too. IMF thinks it will be applicable across the banks. Trouble is, I guess, it was only part of IMF's litigation claim. 1.68 or so - tempting 3 MTH DAILY
Ok, so that was 1.65 broken. Possibly a reversal candle though this week. Needs to recover above 1.65 quick or looking for lower target - maybe 1.30? I added at 1.655. Will wait for possibly lower before adding again, if I add. Hasn't come off too well butting heads against banks - one partial win against ANZ that disappointed some, and one loss against Bank of Queensland. Motley Fool still has a BUY on it, and here's 14th Feb commentary from Montgomery Fund analyst: "BENTHAM IMF: SMOOTHING OUT THE LUMPS TIM KELLEY February 14, 2014 Law and money One listed company that we find interesting is Bentham IMF Limited (ASX:IMF). IMF is a litigation funder that provides the money to mount class actions in return for a share of the proceeds where cases are won or (more usually) settled. Over the years, IMF has developed a reputation for being able to identify and back cases that have a very good chance of success, and for doing so profitably. There is one big issue that arises in respect to IMF: its cashflows and earnings are very lumpy. A big case can have a significant impact on profits in any one year, and case timing is very unpredictable. IMF has little control over when a case will arise or when it will be concluded, and so earnings numbers swing about quite a lot. This makes valuation a challenge. Thinking in terms of multiples and growth rates is not much help, and to make any sense of the business you have to be able to think long-term to even out the peaks and troughs. If you take the time to do that though, it seems to us that the investment merits become much clearer. While the number of large cases that start or complete in any given year is pretty much a random number, the number that will flow through the business over, say, 10 years, can be estimated with more confidence. There will always be stakeholders who are the victims of aggressive behaviour by corporations, and as the dominant Australian litigation funder, IMF will get to look at a large percentage of those cases. IMF will win some and lose some, but its track record indicates that it has the skill to take on the cases it will win (notwithstanding its recent loss in the Bank of Queensland case). The outcome on any single case may be hard to predict, but the result over many cases is more certain. At the moment, IMF has a good portfolio of cases up its sleeve, and over the next 3 years those cases should flow through into some healthy earnings numbers. However, 2014 is looking very ordinary. The stock market tends to be fixated on the short term, so IMF doesn't get a lot of love in years where its results are weaker. This looks to us like just the sort of opportunity a long-term investor ought to be interested in. The Montgomery Fund owns shares in IMF."
Monthly chart is showing potential imo. History shows that IMF can spend a lot of time in hibernation before streaking higher. Took around 5 years from '03 to '09 (yes I can count) to break above its old high with a parabolic move. Then it went to sleep for another 5 years, and now in 2014 its again butting against the level of the 2009 high. It has been announcing litigation in the US lately. It would only take one mega win to fuel the next parabolic price move.
Still percolating beneath a true breakout as today's news gets it jiggling the lid again. Aspirations in USA and announces a case win by its 100% owned US subsidiary today. Still a bullish looking long term chart and might be forming a channel uptrend so far this year?
This chart is still looking pregnant to me. Better to buy on confirmed breakout above 2.20 I think, or maybe a lower risk speculative buy if chart returns to 2.00 or 1.95 Clime Asset Mgt through their stocksinvalue service have promoted IMF to their very select 'stocks we like' list. Valuation for fy15 is currently 8% higher than today's price of $2.14 (their value fy15 is $2.32) A caution though, stocksinvalue's 'stocks we like' list has taken apounding lately as it conytains ASL, BHP, MMS, TRS, NHC, WOW They see funded litigation as having growth potential in Australia as our public gains awareness that such a partner in litigation is available. IMF being the first to try this business here in Oz. Main assumptions they make: that IMF's expansion offshore will continue successfully, that they don't have shocker losses in court, and that they go on picking the cases with strong winning chances. They figure that IMF, as an ambulance chaser, is more insulated from weakness in the economy than most businesses. Also "The balance sheet remains in sound shape, with net cash of $58m on 30 June 2014."
I'm being wary of break above 2.20 today. Waiting for confirmation. Might be too soon and false break. Bit academic for me as unlikely to add. Disclosure: holding for long term Sentiment: I suspect it's got a bigger future, sound 'balance sheet', growth chances, pays divvy
2.20 breakout looks confirmed this time? [imgz=http://forums.silverstackers.com/uploads/1893_imf_feb_10.gif][/imgz] IMF Bentham Ltd records 152% rise in profit: Is it too late to buy? By Ryan Newman - February 10, 2015 "What: Litigation funder IMF Bentham Ltd (ASX: IMF) released its half-year profit results after the market's close on Monday, revealing a massive lift in income and profits compared to the same period in 2014. So What: Over the period, a total of 10 cases were concluded (compared to just two in the corresponding period), which helped the company grow net profit by 152% to $23.01 million on the back of a 131% lift in total income from litigation contracts to $77.64 million. Meanwhile, it improved its cash position considerably to $134.4 million as at 31 December 2014 (from $105.58 million at 30 June 2014), and kept its interim dividend at 5 cents per share. As impressive as the report may seem at first glance; investors need to remember just how erratic earnings can be in the litigation industry. In the 2014 financial year for instance, net profit fell 29% which resulted in a 41% fall in earnings per share (EPS). For this reason, the company does not provide forecasts for future periods, but did state that it had commenced nine new cases during the period which have a maximum claim value of $221 million as at 31 December 2014. IMF Bentham isn't the only legal company posting strong results today with Slater & Gordon Limited (ASX: SGH) also lifting profit and revenues by 46.5% and 37.6% respectively. Now What: Despite the lumpy earnings, IMF Bentham is a well-run company which continues to expand internationally, whilst also improving its reputation for success. While the stock is trading at a 52-week high of $2.26, it could still deliver excellent returns for investors over the coming years."
Motley Fool's Hidden Gems tipster service downgraded IMF from Buy to Hold yesterday after close of trading. Their argument is complicated, but boils down to the following at yesterday's elevated price: * The chairman retired and one of the founders is retiring from the board. The M.D, another company founder, stepping down from his position. * Increased competitiveness from other litigation funders in Australia and USA. This coincides with a drop in currently funded cases which might be due to increased competition. * A reading from new M.D's comments that the company might take on riskier cases. Motley sees a possibility of reduced return on investment because of this. One of the attractions of the company to Motley has been the shrewd selection of litigation cases based on chance of success. Chartwise the impact so far has been no more than a pullback that might be expected anyway. Early days, but still a strong chart while price stays above 2.20 imo?
Here's one - the irrefutable, 100% reliable, take this to the bank, three inside up candlestick reversal pattern: IMF Daily Feb 20 [imgz=http://forums.silverstackers.com/uploads/1893_imf_3_mt_daily_mar_20.gif][/imgz] ^^^ Note that volume on the two up days is weak, so not much weight to it probably. http://fita.web.id/index.php/tutorial/forex/90-triple-candlestick-patterns.html The three inside up candlestick formation is a trend-reversal pattern that is found at the bottom of a downtrend. It indicates that the downtrend is possibly over and that a new uptrend has started. For a valid three inside up candlestick formation, look for these properties: The first candle should be found at the bottom of a downtrend and is characterized by a long bearish candlestick. The second candle should at least make it up all the way up to the midpoint of the first candle. The third candle needs to close above the first candle's high to confirm that buyers have overpowered the strength of the downtrend.
