 Good day, fellow investors. Now we have recently started analyzing food and agriculture stocks as a way to protect our portfolio from whatever can happen in the economic environment in the future because food demand is expected to grow. One significant part of the food chain is seafood. And today we're going to discuss a little bit the seafood sector and nine interesting seafood stocks too. Let's say make our portfolio defensive but also to take advantage of the positive seafood trend that's going on. Many have been discussing how organic is the next trend in food but if we look at Google searches over time seafood has been constantly increasing in searches and organic has been declining since 2004 which is very interesting and shows that there is a positive trend backing seafood. Not that much organic. What's also very important is that wild catches are stable because you have to be very careful how you fish in order to not over fish and there are quotas all around the world where governments protect what is there and the growth in fishing is limited. Therefore aquaculture has really exploded in the last 40 years and is expected to continue to grow in the future because there is more demand for seafood. As you can see demand for seafood has been exploding and is expected to constantly significantly grow in the next 20 40 years. So the trends are positive but it is also important to mention the risk. Seafood is not that defensive as normal food and agriculture because seafood is also cyclical. So you have to really see how the cycle moves. Fisheries can get overfished so there can be situations where prices are high but there is not enough supply or on the other way there could be really good catches really good seasons that really create oversupply and low prices low margins. Further there can be diseases in aquaculture bad weather bad temperature El Nino the Gulf stream was the temporary so a lot of issues around seafood that one has to really take into account when investing. Nevertheless let's dig into some stocks to see what are the risk reward and what is the market sentiment in relation to seafood stocks. The first stock I want to discuss is Highliner Foods which is the company that is growing through acquisitions. I always like companies that grow through acquisitions in a growing sector because usually companies are bought from a current view perspective but the future growth is really what brings the benefit to such companies. An example of such a company that has been growing through acquisition is capstone paper and packaging. As you are ordering more and more online the company has really taken advantage of past acquisitions. Similarly Highliner Foods has been taking advantage of past acquisitions. However the problem is that in the last four years revenue has been flat and earnings have been declining a little bit. Now if that is a temporary issue Highliner will be a great success in the future especially as they continue to invest and acquire other companies in a very very fragmented sector. Secondly the price to earnings ratio is just 14 and the dividend yield is 4 percent which is above market averages. So that's look like a good investment. You get paid while you wait. However the company requires much deeper analysis in order to see if it is a good investment. Nevertheless it is promising. Clearwater Seafood also has a price earnings ratio of 14 and the stock price is trading at 52 weeks close. The company has lost its monopoly on Arctic surf clam and has seen its revenue significantly decline in the last quarter. Now again perhaps such declines are excellent investing opportunities as the long-term trend is positive. Another company that I want to discuss is Marine Harvest. It is a Norwegian salmon producer and it has really taken advantage of the huge increase in demand for salmon and higher salmon prices. You can see the salmon consumption over the last 19 years has been expanding at 7 percent per year. The trend is still strong so people expect again much more demand for salmon. However in 2018 they expect lower salmon prices because the supply will grow at 12 percent. Nevertheless if everything continues as is a long-term investment might be interesting. Probably the price earnings ratio won't be 10 in the future and the dividend won't be 10 percent perhaps 5 but there is uncertainty and investors don't like uncertainty because nobody can see the price of salmon in 2018 and 2019. It will be lower but the question is how much lower it will be. So in such a scenario you have to really see okay I want to invest in the company I want to be exposed because of the positive long-term trend but you really have to invest in stages here. Nobody knows what will happen to salmon prices but the question is will this company go bankrupt. No will I get a dividend if I buy it yes will it be 10 percent will it be 5 percent it is uncertain. What's the risk of the company going bankrupt in the next five years very very low if something crazy doesn't happen in the world of salmon and how much salmon we eat. So really look at uncertainty and risk as again a diversification part of your portfolio. I cannot tell you that the stock price will surge in the next 12 months that's something that in this case in all seafood stocks I cannot tell you. In the next 10 years can I tell you that there will be ups and downs and that the stock price will be higher than it is now very very likely. Leroy Seafood Group is another Norwegian company a little bit less focused on salmon however they are all focused on that one fish. The price earnings ratio is again low at 7 so it seems like another interesting salmon investment. Another not Norwegian from the fore-oars is Bakafrost same story here depending on salmon prices however if you look at the company owned by insiders Bakafrost is the stock for you as the main shareholders are insiders and they are doing what they need to do to protect their ownership. Ostefol Seafood is a company that owns 50% of Leroy has a lot of other fishing production in Peru and Chile but that is just a small part of revenue. So if you are looking for arbitrage between Leroy and Ostefol you can see what is cheaper and how to take advantage of that. Now there is also salmon producing in Tasmania so Tasal Tasmanian salmon is an Australian company which has excellent fundamentals. EBTDI has been growing cash flows are stable and the dividend has been increased over the last five years. As long as there is demand for salmon in Asia and in Australia this company will do well and it is investing a lot in future growth. So this company really looked like growth companies at price earnings ratio of 10 and a dividend yield again of 4%. There is no point in continuing to discuss more Norwegian salmon producers so I'll just mention Greek Seafood and Salmar that have the same characteristics as the above mentioned companies. What is interesting about Salmar is that they invested about 90 million dollars in offshore salmon farming. This is the Ocean Farm 1 and will be the world's first offshore fish farm that's a pilot project. However it shows how there will be competition there is competition in the industry and everybody is trying to find a way how to cultivate those fishes at lower prices. So what's left to do really analyze the salmon sector how low can salmon prices go and see if those dividends those high dividends in the salmon environment are sustainable. If they are we can see some lower prices where that can be taken advantage before the next jump up in salmon prices the next supply gap as salmon prices salmon demand is going up. Further those Canadian fish companies US fish companies look very well because the sector is positive demand is positive fish food is should be healthier than meat and an average American eats 144 pounds of chicken and beef and only 14 pounds of fish per year so if you want to live healthier I hope the world will live healthier we'll want to live healthier so we have to eat more fish in relation to meat which is again a positive trend. Thank you for watching we'll be digging deeper into the salmon sector and into those Canadian US frozen food stocks in order to see if there is some more investing potential. Share your thoughts what do you think did I forget something some interesting companies to take advantage of the sector that are cheap and that could lead to stable long-term profitable low-risk high reward returns. I'm looking forward to see you in the next video.