Biomass focus sends salmon shares on course to the record books

Aslak Berge

Speared on by biggest riser SalMar (+4 percent), stock market shares rose sharply Monday.

Marine Harvest, Norway Royal Salmon, The Scottish Salmon Company, Lerøy Seafood Group and Grieg Seafood (need to take note of this new record

Source: Sparebank1 Markets

End share
Seasonally, salmon price turns at the end of October/ beginning of November. After that shares normally shoot up, as demand for salmon runs faster than demand in the run up to Christmas. These shares are listed at the Oslo Stock Exchange.

If an investor wants a piece of this, the entry must happen before the expected salmon price rise. When many investors do this at the same time, that door will get narrower.

The background for the price increase is because of a slimmer Norwegian salmon biomass compared with last year. Challenges with lice have resulted in the salmon being taken earlier out of the sea, with a lower harvest weight. This in turn means that farmers misses weightof high-priced growth. It also mean some higher production cost per kilo.

Weak production
“With poor production in sea, farmers need to build more biomass than we earlier anticipated. The consequence of this is negative to flat supply growth rest of the year,” wrote analyst Tore A. Tønseth, in Sparebank1 Markets, in his weekly salmon report.

Tønseth points out that there is a relatively large spread in the valuation of salmon shares. His favorites in the sector are currently Lerøy, NRS, Grieg Seafood and The Scottish Salmon Company, all of which are given the “buy” recommendations.

Source: Sparebank1 Markets

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