July 1st, 2021 | 11:12 CEST
Siemens Healthineers, Royal Helium, Linde: Three stocks with momentum
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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
Siemens Healthineers: Breaking out to a new level
Siemens equipment has always been well represented in radiology systems around the world. The health division of the large conglomerate was spun off in 2018 and is also listed on the stock exchange as Siemens Healthineers. Although the Company is well-positioned, Siemens Healthineers suffered from the pandemic. Many preventive checkups were postponed, or chronic patients were reluctant to go to the doctor because of the general situation. Nevertheless, the bare figures did not turn out so badly. A 10% lower profit was acceptable to even the most skeptical given the unique situation.
The diagnostics division of Siemens Healthineers was able to profit from the pandemic. The rapid antigen tests, in particular, were in demand - the queues in front of the test centers still speak a clear language today. Should the delta variant of the virus encounter rising case numbers again in the fall, the high testing, which has declined somewhat because of low incidences, is likely to start up again. Siemens Healthineers is well-positioned and continuously rebuilding; the Company is thinking about selling its ultrasound division. Some time ago, it bought a cancer specialist in the United States. The share recently broke out to a new high and thus also looks good in the long term. Given the recent price gains, however, investors should wait a little longer. The next weakness is bound to come.
Royal Helium: Helium specialist takes the next step
The Royal Helium share is also going through a phase of weakness - at least if you measure the value against its highs. Royal Helium owns 400,000 hectares of promising land for helium production in the Canadian district of Saskatchewan. The Company has made news by successfully discovering helium deposits in three of three wells in recent months. Most recently, the Company secured financing of CAD 17.2 million. If the share price rises above CAD 0.75, Royal Helium could receive further funds, as the participants in the capital measure have received corresponding warrants. The financing is aimed at enabling extensive drilling and development work. Furthermore, seven new wells are planned.
After the first successful drillings have already caused the share to jump for joy, the current level could offer an exciting opportunity for new investors. In the course of the financing and the new shares, the share price has come back a little. However, if Royal Helium continues its expansion, as it did in the first quarter, the stock should become interesting again. Helium is currently in short supply, has always been expensive, and is used in medical technology, space travel and chip production. Royal Helium is a speculative small-cap in an exciting industry.
Linde: Positive development
The German Company Linde is also involved in gas. The Wiesbaden-based Company is one of the leading suppliers of gases for metal processing plants, the chemical industry, the food industry, and medicine. While the industry suffered from the general conditions in 2020, Linde held up quite well. Operationally, in particular, things went well. The Group is also benefiting from the renewed rise in energy prices. These had weighed on Linde in the previous year. The shift towards sustainability could also have a negative impact on Linde in the short term. In the long term, however, development in this area can also be an opportunity. The capital market is anticipating a positive development - the share has been developing positively for a year and gained around 30%. But Linde is no longer a high-flyer.
Gases, and especially special gases for medical technology, are an interesting field. In many places, helium and the like are only a by-product. In Saskatchewan, where Royal Helium operates, high concentrations make direct extraction a viable option. The continuing demand for medical equipment, but also for chips, and the underlying trend of rising commodity prices offer good prospects for stocks in the sector. While companies like Siemens Healthineers and Linde are very solid to dull, Royal Helium can add momentum to a portfolio. Investors should allocate such stocks according to their risk profile.
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