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

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

A recreational fisherman holds a fishing rod with his hands apart indicating it was this big with a smile on his face.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »