11. January 2021 | 08:50 CET
NIO, Royal Helium, Linde: Here come the long-runners of tomorrow
Anyone who bets on trending stocks on the stock market knows the problem: it's hard to chase the prices and get in after significant price increases. But sometimes the market is just crazy and tends to exaggerate. Despite rocketing rises, some stocks keep climbing. Investors with great courage nevertheless jump at the chance, as in the case of the hydrogen share NEL, which has rushed from record to record. Those who pay more attention to risk look to second-tier stocks that are yet to make a chart breakout. The important thing here is that the associated investment story also has something to offer - such as with the Chinese electric car pioneer NIO.
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ISIN: CA78029U2056 , US62914V1061 , IE00BZ12WP82
"[...] 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
NIO picks up speed in Tesla's slipstream
The US-listed electric car maker's stock outperformed Tesla's between mid-October and December, but the stock also entered a clearer consolidation after that. Around the turn of the year, the price trends of both Companies converged sharply. While the Tesla share is already rushing from all-time high to all-time high, the Chinese share is still trading just below this mark. From a price of USD 55 or more, the value could gain new momentum.
The latest sales figures show that NIO also has a lot to offer in terms of fundamentals. Deliveries in December exceeded the previous year's figure by 121%. Fourth-quarter sales also exceeded expectations. On Saturday, the Company unveiled several innovations at its NIO DAY. Among them, a new model that, for the first time, is not an SUV. There is also speculation about whether the automaker will flex its muscles in "autonomous driving" and show what it can do. Given the hype in the markets, NIO could be an alternative to Tesla. However, investors should be aware of the hype and realize that they are jumping on a moving train. In this regard, caution is the top priority.
Royal Helium: what will happen in the next four weeks?
The Royal Helium share train is currently making a stopover - the share has been hovering around the CAD 0.45 mark for days. Just below CAD 0.50 is a course high from the beginning of August, which currently serves as resistance. Royal Helium operates on a 400,000-hectare property and drills there for natural gas to extract helium. Helium is needed primarily by the high-tech industry. Examples include medical technology, rocket construction and laser technology. Also, helium is used as a lifting gas.
A few days ago, Royal Helium announced its intention to directly invest the recently raised funds amounting to more than CAD 6 million. A three-well program commenced late last week. The Company expects results from the first wells within the next four weeks. As a partner, Royal Helium was able to win the service provider Savanna Drilling Corp., which has already completed 25 such wells in the past. Since Royal Helium's stock is still showing little momentum, the tech profiteer from the second tier could become an insider tip.
Linde: The gas specialist is preoccupied with itself
The Linde share is anything but an insider tip. The value is trading at an interim high around EUR 220 but is far from becoming a favorite of traders and short-term investors. The Company is considered a gas specialist and thus benefits from the high-tech industry's increased demand. But the Company is also preoccupied with itself: Linde acquired rival Praxair a few months ago and has been busy integrating the Company ever since. Then there was the pandemic in 2020, which hit the Company at the worst possible time. When other companies were already cautiously optimistic about the future again in May 2020, Linde conceded its annual forecast.
However, 2021 could be better for Linde, with catch-up effects after the crisis year beckoning. The integration of Praxair should continue to advance, and no longer weigh on the figures. Compared to small caps like Royal Helium, increasing demand for gases like helium is not as significant for Linde - the Company has too many footholds. Also, a corporation is always preoccupied with itself. Therefore, a big ship like the Linde share comes through crises better, but in return does not develop such a great dynamism during friendly market phases. Given the rising demand for gases and the all-time high of the share, Linde is nevertheless worth a look.