7 Most Undervalued Financial Stocks To Buy According To Analysts

5. Burford Capital Limited (NYSE:BUR)

Analyst Upside: 52.79%

Forward P/E: 9.68

Burford Capital Limited (NYSE:BUR) offers legal finance products and services internationally. Burford operates through two segments including Capital Provision and Asset Management and Other Provision.

Burford Capital Limited’s (NYSE:BUR) track record is impressive, with a consistent history of delivering high returns on invested capital. In addition to that, Burford had generated $629 million of cash and securities, as of Q3 2024, driven by the case recoveries and settlements in FY23.

During the third quarter of 2024, the company’s net realized gains more than doubled, which led to significant cash during the quarter. The new commitments increased more than five times over the comparative period, indicating strong business activity.

The company is well-positioned to capitalize on the growing demand for litigation finance. As per the Global Disputes Forecast 2025 by Baker Mckenzie, cybersecurity and data privacy, AI, employment, commercial, tax, patent, and trade disputes hold the greatest risks for organizations. 85% of the correspondent organizations will increase their legal spending on disputes in 2025, while 90% of respondents cited litigation as a preferred mechanism to solve tax disputes.

Greenhaven Road Capital stated the following regarding Burford Capital Limited (NYSE:BUR) in its Q3 2024 investor letter:

“Burford Capital Limited (NYSE:BUR) – We have owned litigation financier Burford for less than two years, but the progress was not long in waiting. Substantial developments in their legal case against Argentina have occurred, with the potential proceeds being multiples of BUR’s current share price. The Argentina case is far from their only valuable asset and Burford also holds another $5B of cases in their portfolio that could be worth substantially more.”