28. May 2021 | 08:14 CET
Royal Helium, NEL, Steinhoff: Quick profits? That is what counts!
Earning a lot of money in a short time is ideal for many private investors. But sometimes, things do not turn out the way one expects: share prices go on a roller coaster ride, or a major legal decision drags on. Using three stocks as an example, we explain what brave speculators should watch out for in order to achieve their goal as quickly as possible.
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ISIN: CA78029U2056 , NO0010081235 , NL0011375019
"[...] 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
Royal Helium: Incoming helium producer with a huge land package
The Canadian Company Royal Helium was virtually unknown on the stock market a few months ago. However, the value has now attracted many fans and made a name for itself in Canada's raw materials scene. Why? Royal Helium has successfully discovered helium in the three wells Climax 1-3 and has also proven the economic viability of helium production. Climax 1 is currently being prepared for production. Andrew Davidson, president and CEO of Royal Helium, believes the discoveries "have the potential to be one of the largest helium discoveries in Saskatchewan history."
The Canadian District of Saskatchewan is known for large concentrations of helium. Often, the noble gas is extracted merely as a byproduct. Thanks to high concentrations and steadily increasing demand from medical technology, chip manufacturing and aerospace, Royal Helium could soon be an established producer. The Company sits on a vast land package and is the world's first listed helium stock. Neighbor, North American Helium, has completed several wells and is already a producer. Investors believe in a similar success story for Royal Helium and recently oversubscribed a CAD 15 million capital increase. Thus, the Company can push ahead with its development, go into production, and possibly drill more holes directly. On the stock exchange, the share recently surged dynamically and reached values of EUR 0.50. The share price is now at a record level. There is still room to reach the previous record price of EUR 0.63. As the Company enters a new phase, the way could be clear for a revaluation.
NEL: Sell-off has destroyed confidence
The NEL share is currently undergoing a revaluation of a different kind. After hydrogen shares were the measure of all things last year and around the turn of the year, disillusionment set in. Share prices weakened and there was also speculation about the hydrogen business. The trigger for this was some shocking sales figures from the industry. Most recently, however, the NEL subsidiary Everfuel announced something tangible: the Company is to build 19 hydrogen filling stations in Denmark by the end of 2023. Such news has hydrogen investors cheering, which shows that the entire industry is still in its infancy. Everfuel made just EUR 191,000 in sales in the entire first quarter - that is what a McDonald's on the highway makes on a good weekend.
But the hydrogen sector is an excellent example of the fact that sometimes numbers are not really decisive. NEL's stock was already surging in the past five trading days but then bumped its head. After the sell-off, the share faces several resistances that are likely to make life difficult. With news of the construction of several gas stations within the next two years, stocks like NEL will not attract new investors anytime soon. The sell-off has destroyed confidence. NEL is no longer suitable as a stock for short-term speculation.
Steinhoff: Will furniture be the next big thing?
The Steinhoff share has been in the public eye for many months now. The furniture group from South Africa is facing lawsuits worth billions because of an accounting scandal. For months, small German investors have been speculating whether a settlement would be reached that would get the stock back on track. Long-time investors will know that waiting for legal developments can be pretty grueling. Speculators will also have to ask themselves what development they expect from Steinhoff after the legal battle. Furniture is undoubtedly not going to be the next big thing on the stock market any time soon. Of course, penny stocks like Steinhoff always offer the chance of steep rises. But the question is how sustainable these rises can be. After months of waiting, Steinhoff has run out of steam. The share has been trading around EUR 0.11 for a long time. Although this can change through a settlement, the value is still not hot.
Anyone looking for exciting speculative objects on the stock market should first and foremost pay attention to whether the investment story is still current. Steinhoff is the best example of yesterday's story. NEL also has nothing to offer except visions of the future. Although the budding small Canadian helium producer Royal Helium is also a growth company, a constant news flow ensures that the individual mosaics only gradually form a complete picture. Since Royal Helium currently has only three wells but owns a huge prospective mining area, there is a good chance that this growth story will continue. As the share is volatile, investors should enter the stock in several installments and weigh the value in the context of their risk profile in the portfolio.