Burford Capital's (LON:BUR) investors will be pleased with their decent 34% return over the last five years

Simply Wall St.10-03

When we invest, we're generally looking for stocks that outperform the market average. Buying under-rated businesses is one path to excess returns. For example, long term Burford Capital Limited (LON:...

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Buying under-rated businesses is one path to excess returns. For example, long term Burford Capital Limited (LON:...</p>\n\n<a href=\"https://finance.yahoo.com/news/burford-capitals-lon-bur-investors-102720190.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4164","symbol_name":"特殊金融服务","start_time":0,"source_url":"https://finance.yahoo.com/news/burford-capitals-lon-bur-investors-102720190.html","article_id":"2472169676","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/v830uiUbywMvi09cFGUIbg--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/2f37c2f3d7e38349073be1bea04076e3"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2472169676","pubTimestamp":1727951240,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"When we invest, we're generally looking for stocks that outperform the market average. Buying under-rated businesses is one path to excess returns. For example, long term Burford Capital Limited  shareholders have enjoyed a 27% share price rise over the last half decade, well in excess of the market return of around 4.9% .Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share .During the last half decade, Burford Capital became profitable. That's generally thought to be a genuine positive, so investors may expect to see an increasing share price.The image below shows how EPS ","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4164":"特殊金融服务","BUR":"Burford Capital Ltd."},"translate_title":"Burford Capital(LON：BUR)的投资者将对其过去五年34%的可观回报率感到满意","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BUR":1},"content_text":"When we invest, we're generally looking for stocks that outperform the market average. Buying under-rated businesses is one path to excess returns. For example, long term Burford Capital Limited (LON:BUR) shareholders have enjoyed a 27% share price rise over the last half decade, well in excess of the market return of around 4.9% (not including dividends). \n Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business. \n See our latest analysis for Burford Capital \n While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS). \n During the last half decade, Burford Capital became profitable. That's generally thought to be a genuine positive, so investors may expect to see an increasing share price. \n The image below shows how EPS has tracked over time (if you click on the image you can see greater detail). \n\n\n\n  AIM:BUR Earnings Per Share Growth October 3rd 2024\n \n\n We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.. \nWhat About Dividends?\n It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Burford Capital the TSR over the last 5 years was 34%, which is better than the share price return mentioned above. This is largely a result of its dividend payments! \nA Different Perspective\n Burford Capital shareholders are down 8.2% for the year (even including dividends), but the market itself is up 14%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 6%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that  Burford Capital is showing  2 warning signs in our investment analysis , and 1 of those is a bit concerning... \n There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying. \nPlease note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges.\nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2472169676"}