Hi Paul,
I completely agree with your view that wild caught seafood is running out, the stats support it as does my dwindling success when heading out fishing. Farming that produce in a sustainable way makes total sense. That said, there are many complexities in agriculture, and from my limited experience it seems there are even more complexities when farming seafood, the environmental outcomes are just one of them. I spoke with a colleague about your question who suggested reading the book “Toxic” by Richard Flanagan, not just because it’s a critical expose’ of the Tasmanian Atlantic Salmon industry, but more that it’s probably the reality of what happens when farming commercial quantities of fish and as public awareness increases of the strategies used then costs generally rise – that’s just the economic reality.
Lazy is not in our DNA at MM, however frankly I don’t have a great handle on aquaculture. My experience is limited to being involved with Huon (HUO) when we had an analyst covering it and each time we met with the company the commentary was along the lines of ‘things are going great – but’ or ‘we’re close to doing this or that’ and while I think as a company they are pioneering an industry that has legs, their share price has reflected the complexities of what they are trying to achieve.
We currently have some involvement with a company called Sea Forest (www.seaforest.com.au ) which I would encourage you to have a look at. This company more on the environmental side of aquaculture rather that food production and that in our view is a better way to play it. This is not a listed company, but may well be one day.
On the protein replacement theme for humans we actually believe meat substitutes are worth watching carefully and there are some large mostly US companies doing interesting things here. Beyond Meat (BYND US) is a $US 9bn that springs to mind.
I have looked at the 7 stocks listed and from a technical perspective my preference is for $227m business Murray Cod (MCA) however their earnings are not really giving me a lot of confidence. I see one broker covers Murray Cod (MCA) with a buy and 55c price target, I will try to expand my knowledge of the space from there.
