Biology separates the chaff from the wheat in salmon stock

Analysts highlight one stock in particular that could make it sharp in 2014.

2023 was a quiet year with very large gaps in stock market returns. One company has done this more clearly than the rest.

– On the one hand, we have SalMar, which rose by almost 40 percent, while Lerøy fell by about 30 percent. It shows how important it is to control biology, and the picture shows that the most demanding agricultural regions have proven even more demanding this year, says analyst Martin Calland at ABG Sundal Collier. FinanceAffairs.com.

Biological challenges, including PD (pancreatic disease), ILA (infectious salmon anemia), salmon lice, winter sores, and spiro parasites were required along the Norwegian Kiss. It was worse in Scotland, which suffered a higher death rate from warmer waters, salmon lice and jellyfish.

There are still a few days left in the year, but in 2023, the price of salmon is scheduled to reach NOK 92 per kilo. This is the highest level ever recorded, mainly due to limited supply. This is not expected to change in 2024, although analysts expect the price to fall to NOK 91 next year.

Incidentally, it is much lower than the forward price of Fish Pool, which is currently 98 NOK.

The biggest uncertainty is Chile and the risk of algae blooms associated with El Niño, which could lead to high mortality and loss of market volumes. This would lead to much higher prices than we currently have in our estimates, says Carnegie analyst Philip M. Scrase.

When our analyst team highlights which salmon stocks investors should invest in in 2024, there's one in particular – Mowi.

– Mowi is trading at a P/E multiple that is 30 percent below the average over the past five years, and at a record discount compared to other breeders, Caland tells Finansavisen.

Niels Thomsen of Fearnley Securities notes that Mowi is priced at a P/E of 11 on his 2024 estimates.