I agree with your sarcasm RIB, it is a worry that OBL is not...

I agree with your sarcasm RIB, it is a worry that OBL is not buying back its shares with the share price at 5 year lows.

Why not? As at 31 Dec 22 they had cash and receivables of $220m. The buy back is just ‘up to’ $50m. So far they have bought back less than $1m worth of shares and none since 3 March when the share price closed at $3.00.

One reason, we could be coming into a very tough time in the economic cycle and OBL may want to, ‘prudently', retain some cash. But tough times do not affect OBL like others. Their business is about winning court cases and this is not practically related to economic activity. Of course interest expense cost, at the margin, may encourage/discourage non-controlling investors (NCI’s) from investing in OBL, but if the economies of the world go south surely too will their interest rate levels, making OBL a comparatively better investment.

No, the reason must be internal to OBL and their model.

In FY 24, OBL estimate $416 m will be obtained from court cases and elsewhere. While this is not net profit it should set up a bonanza year as surely investment costs and adjustments in that FY must be at least 200m lower. So a net profit around $200m, within two years, for a company currently valued at $655m looks pretty good. So why does OBL not buy back some of its shares now? Am I missing something?

One reason could be that OBL are becoming concerned whether their model and assumptions are accurate. Such estimates were not too good in the last half.

I am an investor because I thought management was very creditable (no dodgy accounting tricks unlike some other competitors) and i liked what they were trying to achieve - No 1 in the world in the management of legal assets. In being an investor i have to rely on case valuations supplied by OBL. How can I value these things? This need for trust, I think, would apply to most investors. It is fading as time goes on and profits fail to emerge. It does not help that the CEO who I have regarded as extremely competent is now bailing ship (albeit slowly).

Maybe Buffet was right. If you dont truly understand a company you should not invest in it. I thought I did understand how OBL works. Now, I just hope current OBL management still do.