Tassal share price has been clipped by a series of...

Tassal share price has been clipped by a series of circumstances.

Some have been outlined in previous threads above, such as:

• Capital raising (SP dilution)
• Longer than ideal pay-back from cap raise
• Increased risk in prawns (new business to Tassal)

But possibly the biggest drag on the SP has been the recent price of salmon on the international market. While it can be argued that this only represents about 20% of TGR sales, nonetheless that price forms the basis of what TGR can expect to get for its product. Below I have charted the price of salmon over the last 6 years and it becomes obvious that the price had fallen more than 40% since June to the first week in October. The early October price is as low as salmon has been since 2015. Tassal had held up well against this product price decline from June until mid-August, but the CR seems to have triggered a double whammy from which it is yet to recover.



The question is, can we expect the salmon price to recover, and how much of the 40% shed will it recover? I'd say judging by past fluctuations in the price that it WILL recover and given that we seem to have just come off the bottom of a severe low, this is a great time to invest in a very well-run salmon business. Looks like the price bounce might already be on, so now is an ideal time to take advantage of that upswing. I know I have.

Very little downside in my view at this price. However, prawns add a new business with product diversity, but with some added risk. If it works well, even more upside.

mutineer