Litigation funding is becoming more competitive too. However, the market is expanding particularly internationally so still plenty of opportunity. IMF funding commitments have grown 39% in the last 12 months.
In terms of valuing IMF, that is also difficult. I haven't found anyone who is able to sensibly provide baseline valuation principles for the company. No doubt some analysts have developed models but I haven't seen any.
I think in the past the "from Balance Sheet" funded projects have on average (which is more weighted to Aust rather than international) generated revenue at 15%. The RoW Fund and US Fund" funded projects however have an objective of ROIC and I am not really sure where that sits. Overall the company advises that for the last 17 years they have had a ROIC of 1.5 times.
IMF declares the total of their claims (referred to as EPV which is the expected value that is able to be paid if a claim is successful) they are pursuing but I find it hard to relate that ROIC.
The fixed costs of the business will remain relatively static ($31.5m) albeit with some increase expected as they expand the business and expand internationally (including newly established offices - Europe, Asia).
I believe that if the company was easier to value their would be much greater shareholder interest.
IMF Price at posting:
$3.11 Sentiment: Hold Disclosure: Held
