30. March 2021 | 08:06 CET
GameStop, Royal Helium, Varta: "Hot Picks" for the Portfolio
Many private investors are looking to make a quick buck on the stock market. Time and again, this leads to investors taking on too much risk in relation to their financial situation. However, it can make sense to add one or two speculative stocks to a balanced portfolio. With only small amounts, it can be possible to achieve real returns even after inflation. We present three stocks and explain whether they are suitable as portfolio boosters or not.
time to read: 2 minutes by Nico Popp
"[...] We expect the first three wells to be drilled, cased, completed and tested by the second week of March [...]" Andrew Davidson, CEO, Royal Helium Limited
GameStop: The name says it all
GameStop's stock has caused a stir several times in recent months. However, GameStop is anything but a future stock. GameStop is a retail chain for computer games. Even older generations should know by now that die-hard gamers now buy the latest games online and download them directly. In an age where TV content is also streamed, downloading computer games is more than obvious. Yet GameStop's stock keeps shooting up. Why is that?
It's not because the Company's prospects are good, but solely because GameStop is so short. Precisely because the business model has no future, many hedge funds are betting on falling prices. However, organized private investors keep driving the price up, forcing the hedge funds to close their positions. Only this strange cat-and-mouse game drives the share - nothing else. If you want to add something speculative to your portfolio, you should make sure that the stock has at least a little substance - so please, stay away from GameStop!
Royal Helium: Helium boom in Saskatchewan?
A speculative substance stock is Royal Helium. The budding helium producer launched three wells in the Canadian province of Saskatchewan a few months ago. The region is characterized by high deposits and good conditions for producers. The Company holds 400,000 hectares of helium rights and plans to grow strongly in the coming months. Currently, test production is underway at two of the three recently drilled holes. If this test production yields good results, Royal Helium's stock is likely to be revalued.
Just a few weeks ago, neighbor North American Helium started production and advanced 25 wells. While Royal Helium is currently turning a smaller wheel, its neighbor's success shows what is possible in the region. In addition, several successful players in one area ensure that infrastructure around the noble gas processing and storage is created. In addition to space travel, helium is also needed in medical technology and for the production of microchips. As it is often only a by-product, pure producers are rare. The share price has stalked its previous high in recent trading days but has recently fallen back slightly. Anyone who believes in the business model should take a closer look at the share. In the past, the stock has been good for dynamic increases.
Varta: Many advance praises
Varta is also known as a dynamic stock. The battery manufacturer is top-rated for its button cells, which make hearing aids and also headphones last longer. For months, Varta has also been the subject of fantasies about a possible entry into the production of batteries for electric cars. Most recently, the Company has confirmed its plans. Nevertheless, the share is riding a roller coaster on the stock market. If the market is doing well, Varta profits, but the share dives again if skepticism arises.
Varta is a reliable company that wants to open up a new market. That is fundamentally exciting. Moreover, the latest developments surrounding electromobility show that Varta has good timing with its advance. However, the share has already benefited well from the new fantasy in recent months. It is not clear whether the share price still has that much potential. To add a hot stock to one's portfolio depends on whether the particular investment story also "ignites." While GameStop and Varta are already known to many investors, Royal Helium could offer better opportunities. The Company operates in a promising area and has the potential to surprise. However, the stock remains a "hot pick."