'Big Fish': Valuation of the World's Largest Salmon Farming Companies

Abstract

The recent five years have seen a nearly tenfold increase the salmon stock price index at the Oslo Stock Exchange. This paper tries to shed some light on the reasons why this substantial stock price appreciation has occurred. The primary aim is to ascertain if the market valuation of salmon farming companies can be explained by rational factors, or there is an element of irrational exuberance behind current all-time high salmon stock prices. In particular, we examine the impact of both fundamental and operational value drivers. The results suggest that a structural shift has occurred, leading to a stronger association between fundamentals and market valuations after 2012, suggesting that at least some of the stock price increase is linked to fundamental factors.