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.
The post The Huon (ASX:HUO) share price is up 7% today appeared first on The Motley Fool Australia.
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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.
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