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

During the last six years, the salmon stock price index at the Oslo Stock Exchange has increased by nearly ten times. This article attempts to shed some light on the reasons why this substantial stock price appreciation has taken place. The primary aim is to ascertain if the market valuation of salmon farming companies can be explained by rational factors, or if there is an element of irrational exuberance behind the current all-time high salmon stock prices. In particular, we seek to uncover if a structural break has occurred in the market value formation of salmon stocks. The results suggest that a structural shift has occurred, leading to a stronger association between fundamentals and market valuations after 2012, indicating that at least some of the substantial stock price increase during 2012–2016 can be attributed to fundamental factors.