BROKERS’ NOTES: Trawl fish, troll poultry

Stephan Erasmus, Anchor Capital 

BUY: Oceana 

The company’s fishmeal business is generally weighted to the second half of its year to end-September. Fishmeal prices are holding up nicely, as are fish oil prices. In addition, Oceana says it’s putting a lot of Lucky Star stock through retailers at this point; pilchards are becoming a substitute for chicken as protein.

SELL: Astral 

Whereas Oceana is moving volumes, Astral is struggling due to load-shedding and water shortages in the municipalities where its plants are. Also, Astral faces the uncertainty of whether the government will relax import duties on chicken. If it does, it will be negative for Astral. In addition, Astral is struggling with the bird flu outbreak.