01. February 2021 | 07:20 CET
Royal Helium, Siemens Healthineers, Eckert & Ziegler - Is helium coming after hydrogen?
Hydrogen as an investment topic is on everyone's lips. No other chemical element has such a large occurrence in the universe (outside the earth's crust). But it could also be lucrative to look at the second most abundant element in the universe: helium. Helium has the lowest melting and boiling points of all elements. It is used in low-temperature technology, especially as a coolant for superconducting magnets, e.g., medical technology for MRI (magnetic resonance imaging) equipment. We present investment ideas associated with helium, ranging from the noble gas extraction to its use in certain products. Which stock has the most potential?
time to read: 2 minutes by Carsten Mainitz
"[...] 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 LTD - share price tripled within a few weeks
Royal Helium is focused on exploring and developing a 400,000-hectare helium project in southern Saskatchewan, Canada. Last week, the Company reported that the first of three helium exploration wells, Climax-1, was successfully drilled to the planned depth of 2,600 meters. The Company will evaluate test data within the next three to four weeks. In the meantime, Royal Helium is starting the second exploration well (Climax-2), which is expected to be completed in several weeks.
Last December, Royal Helium raised the necessary funds for the exploration program through an oversubscribed capital increase. The issue price was only CAD 0.22 per share, the exercise price of the linked (whole) warrant with a term of 2 years was CAD 0.35.
Compared to the capital increase, the share price has almost tripled. The shares are currently trading around CAD 0.65, giving the Company a market value of CAD 57 million. Royal Helium is one of the largest helium lessees in the country. Thus, if positive, the test results of the exploration wells will substantially impact the share price. Royal Helium's valuation still has some room to run.
SIEMENS HEALTHINEERS AG - Established player with outperformance
Siemens Healthineers AG is the holding Company of the Siemens Healthineers Group. With several operating units, the Group is one of the world's largest manufacturers of equipment for medical imaging and laboratory diagnostics as well as for hospital IT systems. In addition, digital health services and services for healthcare facilities are offered.
Concerning the first-quarter figures published today, analysts had average forecast sales of EUR 3.595 billion, adjusted EBIT of EUR 562 million and EPS (reported) of EUR 0.33 or adjusted EUR 0.36. The Company will invite shareholders to its Annual General Meeting on February 12.
Since the IPO in March 2018, the stock has performed solidly, outperforming the MDAX by more than 20 percentage points. Even though analysts classify the stock as fairly valued at the current level, the future outperformance of the benchmark index should not be in question. With a market capitalization of around EUR 50 billion, Siemens Healthineers is an established and reliable player that should not be missing from any mid-cap portfolio.
ECKERT & ZIEGLER - Expansion in the USA
With more than 800 employees, Eckert & Ziegler Strahlen- und Medizintechnik AG is one of the world's largest suppliers of isotope technology components for medical, scientific and metrological purposes. The Berlin-based Company focuses on applications in cancer therapy, industrial radiometry and nuclear medical diagnostics. Operationally, the business is divided into the two divisions of Medical and Isotope Products.
Last week, the TecDAX Group announced plans to expand its production site in Boston, Massachusetts (USA), with a new production facility for the contract manufacturing of radiopharmaceuticals. The new so-called GMP facility is expected to be operational by the end of 2021. The Company intends to offer national and international pharmaceutical companies a one-stop solution for a wide range of radiopharmaceutical services.
Eckert & Ziegler is a well-known name in the market. The share has developed phenomenally in recent years. The Berlin-based Company is currently trading at around EUR 54 and has a market capitalization of around EUR 1.16 billion. Analysts at Hauck & Aufhäuser and DZ Bank see further potential and formulate a price target of EUR 70 and EUR 68.10, respectively.