A well-known Halifax investment analyst is bullish on two of the region’s biggest seafood companies.
In the wake of its purchase of major seafood assets in the United States and Asia, shares of High Liner Foods Inc. of Lunenburg are a “buy,” said Michael Mills of Beacon Securities Ltd.
At the same time, Mills maintained his “speculative buy” rating for Clearwater Seafoods Inc., which is in the midst of a major operational turnaround. The Halifax-based shellfish company is the subject of an unwanted takeover bid by New Brunswick fish farming giant Cooke Aquaculture Inc.
“They are different kinds of stories,” Mills said in an interview Monday. “But both have upside from current price levels.”
High Liner’s narrative may be more compelling.
Mills calls last week’s CAD 230.6-million purchase of Icelandic Group’s U.S. and Asian operations “transformative.”
Through the acquisition, which includes Icelandic USA’s processing plant in Newport News, Va., High Liner becomes the dominant player in terms of supplying restaurants, hotels and institutions in the U.S.
Mills calculates that those new assets will boost High Liner’s revenues by 40 percent and also increase profit margins.
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