2024-04-22 12:27:46 ET
Summary
- Mowi ASA is the world's largest producer of farmed salmon.
- The company is operationally excellent but faces structural limitations to growth, just like the salmon industry in general.
- In this review of FY23 results, the author continues to find excellent operations, and analyzes the effect of Norway's resource rent tax.
- The article also analyzes the strategic alternatives that Mowi has to continue increasing profits and production despite the structural limits of the industry.
- The author considers the stock to be fairly valued, but prefers to wait for lower prices before considering it an opportunity.
Mowi ASA ( MHGVY ) is the world's largest producer of farmed salmon.
I started coverage of Mowi in December 2023 , with a Hold rating. My thesis was that Mowi had outstanding operations and global leadership in the industry. However, I also considered that the company faces technical/biological limits to production growth and that extraordinary rents would attract capital-intensive competitors to the market. The multiples of current earnings implied too much growth, making the stock not an opportunity....
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Mowi Continues To Perform, Is Fairly Valued, And An Opportunity Below These Prices