May 31st, 2021 | 11:14 CEST
Nel ASA, Royal Helium, Nikola, Plug Power - Here comes the second chance
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"[...] 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
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
Nikola - Trend change
A chart turnaround is currently in the offing at Nikola, the developer of battery and fuel cell trucks. The crisis-ridden Company, which went public via SPAC last week, received a buy recommendation at the end of last week, which pushed the share up by more than 18% in the course of trading. The US analyst firm BTIG sees Nikola, which plans to launch its battery-electric truck Tre this year, as a future disruptor of the truck market.
For the current year, the analysts expect only a small number of deliveries. However, they are confident that production will start by 2022 at the latest. By 2024, BTIG expert Gregory Lewis expects sales of electric and hydrogen fuel cell-powered heavy-duty trucks to reach USD 1.4 billion. With the truck maker still in the pre-sales phase, the analyst sets the price target at USD 18 in his initial assessment.
If the downward trend at EUR 16.30, which has been in place since November, were to be broken, there would be even more potential technically. Initially, the 200-day line at EUR 17.80 would be the target before the annual high at EUR 30.40 beckons. Although there are currently great opportunities for a turnaround, one should not forget that Nikola is a very volatile and highly speculative investment at this stage. BTIG is also optimistic about Plug Power. The Company is already a step ahead of Nikola, as it already has a commercial business in forklifts. In an initial assessment, the price target was USD 40, and the verdict is "buy."
Royal Helium - The start of production is getting closer
In contrast to the hyped hydrogen shares, helium companies are still in the shadows. The application areas for helium, the most common element in the universe alongside hydrogen, are also extensive and at least as important. Demand for helium is rising sharply in the healthcare sector, in chip manufacturing and in the production of quantum computers. According to expert forecasts, demand in the rapidly growing space business is likely to explode in the next few years due to companies such as SpaceX. Currently, NASA is the largest buyer worldwide. On the other hand, there is a shortage of supply.
There are currently only a few pure helium companies on the stock market to participate in the rising demand cycle. Royal Helium is the second-largest helium landowner in North America and has access to approximately 400,000 hectares of prospective helium land in southern Saskatchewan, Canada. The projects have the perfect infrastructure and are located close to highways, roads, cities and existing oil and gas infrastructure.
Last month, Royal Helium announced a milestone. Test drilling at the Climax I through III projects have confirmed an economically viable concentration of helium. The Company can now go straight into production here.
The cash flow generated is to be used to finance further test drilling. In contrast to the production of gold or silver, with helium, it is possible to go into production immediately with a drilled hole. This circumstance enables Royal Helium to produce cash flow immediately.
Additional capital, which is being generated in a private placement currently underway, is expected to help accelerate the process. For this purpose, 30 million new shares in combination with 15 million warrants will be issued at a price of CAD 0.50. As a result, the Royal Helium share price came under pressure in the short term and reached a low of EUR 0.33. Currently, the share price has recovered to EUR 0.48. Should the broad resistance zone at EUR 0.50 be broken through, the all-time high on a closing price basis at EUR 0.54 is already within reach. An exciting Company with the prospect of rapidly increasing cash flow.
Nel ASA - First signs of strength
Last week's horror week began when the Spanish energy supplier Iberdrola withdrew an already announced major order from the Norwegian hydrogen specialist Nel ASA. Iberdrola awarded the order to the US competitor Cummins. A selling wave of the Nel share was set in motion, leading the price once again to the support area around EUR 1.63. This mark, which had been tested several times in recent weeks, proved to be stable again so that the price approached the resistance area of EUR 1.79 in the week.
Should this level be breached due to massive overselling, the EUR 2 mark already awaits as an interim target. The 200-day line at currently EUR 2.23 would then be the next step. Fundamentally, we still see the Nel ASA share as too expensive. A volatile, technical countermovement with a chance of between 20% and 30% price gains is not unlikely. However, the Company's market capitalization of EUR 2.45 billion is still clearly too ambitious.
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