Analysts are telling investors that any dip in the prices of fish companies’ stocks is a buying opportunity. As European consumers turn from meat amid a plethora of food safety scares such as BSE and foot and mouth disease, the three major Norwegian fish companies Pan Fish, Fjord Seafood ASA and Stolt Nielsen have watched their shares rocket.
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One Norwegian analyst urged market spectators that “If you look at the cash flow, I have no problem arguing for investment in the sector. (The companies) are earning money like never before.”
At Pan Fish, the financial results for 2000 proved to be resonant of a larger positive move for the industry. Sales doubled and pre-tax profit was up by fivefold from 1999, reaching 743.2m kroner. Since February of this year, company shares have increased by 25%.
Ola Holen, executive vice president of Pan Fish, is adamant that the industry growth is not wholly attributable to the meat confidence crisis: “The meat crisis is a formidable tragedy which will alter consumption behaviour. But we have to work on our own terms, communicating that Norwegian salmon is excellent food.”
Indeed, the average European has doubled consumption of salmon in the last decade, and farms have sprung up to cope with demand as wild stocks were destroyed.
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By GlobalDataIntense focus on the problems of the meat trade is certainly boosting industry production dramatically however, and investors are becoming increasing fish focused.
Hilde Irene Huse, an analyst at Christiana Markets, recommends buying the stocks with a year’s perspective, because while this market rush may cool in the short term, longer-term opportunities are still there. Buy the stocks as the market cools therefore, she advises.
