Why IMF interests me at these levels Pt II - potential upside, page-8

I hear what you're saying on the multiple, but looking at what i consider an overpriced competitor (Burford), which is listed on a completely different stock exchange on the other side of the world, doesn't make IMF worth a 23x P/E. For starters, i believe Burford uses very different accounting to IMF (IMF capitalises, Burford expenses its litigation, if my memory is right?). Based on what i know about businesses listed here in Australia with models similar to IMF (i.e. the necessity of constantly buying assets, spending money on those assets, selling/realizing those assets for a profit, then reinvesting all profits into more assets), such as real estate developers, i'm comfortable with a 6x-8x EBIT multiple. Like i said, the 8x is potentially a touch on the low side in the event IMF management executes the plan very well over the next few years (or if they rev up the funds management side of the business and thus rev up recurring earnings), but i have a personal preference in my underwriting of investments to not assume big multiple re-rates to justify returns.

$50m net cash was a bit of a finger-in-the-air job, based on the fact that IMF's average financial year end net cash position since 2009 has averaged $48m. I guess one could argue that number would/should be higher in FY20 given the business will be roughly triple the size of what it was from 2009-2016, so maybe there's some small upside in the market cap figures / share prices to the ones i had.

To clarify what the FY20 figure represents: this is not me saying that the NPV of the current litigation book is worth one thing, and the FY20 number is additional to that. Simply, the FY20 numbers (i.e. the $1.53-$5.11 range i had under the three scenarios) i had were my heavy-handed attempt to put a range around some values of where IMF stock might be trading in August 2020 (post release of FY20 results), based on current business planning and some reasonable assumptions. So, if my "good" scenario turned out to be perfectly correct (i'd say there's less than a one-in-a-billion chance of that being true) and the stock was trading at $5.11 in FY20, i'm saying that you'll roughly triple your money over the next 3 years (5.11/1.78, plus dividends).