The Huon (ASX:HUO) share price is up 7% today

This big fish could be the major shareholder this flailing share needs.

| More on:
recreational fisherman holding fishing rod and hands apart indicating it was this big with smile on his face

Image source: Getty Images

The Huon Aquaculture Group Ltd (ASX: HUO) share price has jumped today, up 7.1% to $2.71.

The salmon company has not released any price-sensitive news to the market but there is a significant new shareholder in the arena. Let’s take a look.

Who’s buying Huon shares?

It was revealed this morning that Fortescue Metals Group Limited (ASX: FMG) CEO Andrew ‘Twiggy’ Forrest has taken a bite out of Huon.

His family’s private investment company, Tattarang, accumulated a 7.33% stake in the salmon farming business on 17 June.

Tattarang secured its strategic stake for $2.48 a share last week, according to a report in the Australian Financial Review (AFR).

Huon share price down almost 40% since February 2020

Like most ASX shares, the March 2020 COVID-19-driven sell-off saw the Huon share price dive 35% from ~$4.60 to a low of $3.05.

The company’s shares have struggled to rebound, down almost 40% compared to pre-COVID levels. And thanks to today’s jump, the Huon share price year to date is about flat – up just 1.1%.

A major catalyst in this underperformance appears to be Huon’s major profit downgrade announcement back in February.

The salmon farmer warned investors that its FY21 earnings could take a big hit following COVID-19 disruptions, excess supply and tighter margins.

Adding insult to injury, the company lost between 50,000 and 52,000 4kg fish after a fire broke out in one of the company’s fish pens in November last year.

Additionally, in January this year, Huon revealed stock anomalies, potentially resulting from criminal conduct by employees. While sales figures were unaffected, the book value of inventory and gross margins is expected to be $2.1 million lower than what was expected for that period.

The company’s half-year results revealed a painful net profit loss of $95.3 million. This compares to its $17.1 million loss in 1H20 and $22.0 million profit in 1H19.

The results announcement triggered a sharp 14% sell-off for Huon shares to $2.63. By 16 June, the Huon share price had hit record all-time lows of $2.26.

Should you invest $1,000 in Huon right now?

Before you consider Huon, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Huon wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Arrows pointing upwards with a man pointing his finger at one.
Share Market News

Here are the 3 most traded ASX 200 shares on Monday

We take a look at the most traded ASX 200 shares by volume today.

Read more »

A man with a scrappy beard and wearing dark sunglasses and a beanie head covering raises a fist in happy celebration as he sits at is computer in a home environment.
Share Market News

Archer Materials share price leaps 7% on patent news

It's good news today for the ASX materials tech company.

Read more »

A young man has a look of alarm on his face as he turns to see the close up face of a brown grizzly bear that is draped over him as part of a large life-size bear skin rug he is wearing over his shoulders.
Cryptocurrencies

Ethereum price rout knocks founder from billionaire’s list. Does he still ‘welcome a bear market’?

The crypto selloff should offer more clarity on which projects are 'long-term sustainable'.

Read more »

A group of market analysts sit and stand around their computers in an open-plan office environment. The central figures are deep in thought about Megaport's recent earnings release
Share Market News

ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints

The ASX 200 index has started the week on a mildly positive note...

Read more »

stylised silhouette of a bear on financial graph background
Share Market News

These are the 10 most shorted ASX shares

Short sellers are currently targeting these ASX shares...

Read more »

Smiling man with phone in wheelchair watching stocks and trends on computer
Share Market News

5 things to watch on the ASX 200 on Monday

Here's what to expect on the ASX 200 on Monday...

Read more »

A group of people in suits watch as a man puts his hand up to take the opportunity.
Blue Chip Shares

2 ASX blue-chip shares this top fund manager thinks are good value

Wilson Asset Management offers its thoughts on a couple of blue-chip shares.

Read more »

Illustration of men and women pushing share price graph up
Share Market News

Why are ASX 200 shares rebounding on Friday?

China's COVID-zero policies have slowed its economic growth and impacted its trading partners.

Read more »