Industry Report: Investing in Seafood

Investing in Seafood is a detailed handbook for the Investor in Seafood of over 100 pages, with complete financial models, detailed company profiles and investment cases for the 50 largest listed seafood companies in the world (including financial forecasts for the 35 largest listed seafood stocks).

The report offers a unique ranking and benchmarking of seafood companies on a large number of key variables, including market cap, enterprise value, revenues, profitability, return on invested capital, revenue growth, profit growth, financial leverage, share price performance and various valuation metrics.

There’s a detailed analysis of the financial performance and key value drivers of six seafood segments, including salmon farming, fish farming, fishing, fishmeal, fish feed and processing. We analyse key value drivers, such as volume growth potential, pricing outlook, cost structures, as well as invested capital, for the six seafood segments.

Key conclusions

  • The listed seafood sector is still small with a combined market cap of €24bn (compared to almost €300bn for the European Food Majors), while accounting for 24% of the global seafood sector in terms of revenues;
  • The valuation of the seafood sector is still relatively low at 10x P/E FY14E (compared to 17x for large branded food manufacturers), while expected to enjoy double digit-revenue growth for the next two years, and a doubling of profitability, driving a strong recovery in return on invested capital to 10% this year;
  • Aquaculture accounts for almost 2/3 of the seafood sector market cap and enjoys by far the highest revenue growth and returns on invested capital, with fish feed among the most attractive seafood segments, followed by salmon farming and fish farming;
  • Salmon farming is the largest seafood segment, accounting for 1/3 of the seafood sector market cap, and has the lowest valuation in the seafood sector due to cyclical peak earnings expected for this and next year; in contrast, fish farming for non-salmonid species has the highest valuation in the seafood sector;
  • A detailed shareholder analysis of the 50 largest listed seafood stocks reveals that founding families are still the main shareholders, controlling over 25% of the listed seafood sector, and that financial institutions are still under represented.

The Investing in Seafood report was authored by David Kerstens, an independent consultant at Food for Valuation and guest columnist for IntraFish, with over 18 years of experience in equity research at top-tier investment banks and over 15 years’ experience in covering the seafood sector.

Order the Investing in Seafood 2013 report now by emailing: cuan.joannides@intrafish.com

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