Stock Picks | HE1 - Proven Multibagger

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22nd May '24 by Mo Sparkle

27 comments 1394 reads

I am surprised that there is no discussion of this company on this platform. Listed as a a ‘sucker stock’ this company has multibagged many times, is one of the most traded stocks on the LSE, and has a proven (independently verified) discovery of very high concentrations of Helium (sans carbons), which is unique. I am puzzled why Stocko has completely misread this one?

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About the Author

Mo Sparkle

Premium Member

27 comments

DWit199

22nd May '24

Several elements suggest that your post could be a "ramp":

This is your first post.
The company is small and highly speculative, a typical story stock.
The language is very positive, focusing on the stock being a "multibagger", having "very high concentrations of Helium" and being described as "unique."
There is no mention of potential risks or downsides.
There is an explicit statement that Stockopedia has "misread" the stock, a technique commonly used to dismiss opposing viewpoints.
Your response to Donald Pond was to criticise Stockopedia
Your response to me was to compare Helium One Global (LON:HE1) to Darktrace (LON:DARK), two companies with no obvious similarities.

Sorry if I have misread your intentions, but that is how it appeared to me.

Wolf of Small Street

22nd May '24

Not sure what else it could be called other than sucker stock at this stage if this is the data the algorithm has to work with. Turd stock maybe?

LOL

Richard Goodwin

22nd May '24

Lot's of people here invest on in AIM companies Mo. There are some really good ones.

Stockopedia's own rankings and definitions are about averages "companies which looked like this before, on average went on to perform like this".

Sucker stocks are so named because although they produce some big big winners, most of them become worth nothing.

If you can really idenitfy the treasures and ignore the rubbish then go for it. It's just that it is really, really, really difficult.

Edward Croft

22nd May '24

Mo - the StockRanks are statistical indicators. They have been shown to have predictive value, but they describe distributions of outcomes. A rank is not a definitive forecast of the future. It describes what may happen to a diversified bucket of similar shares.

On any 2 year view in the last 11 years, you'd have had only a 26% chance of picking a winner if you'd bought a stock ranked 0-20.

Helium One, with a rank of 11, is in that range.

So of course HE1 could be a winner... but it's in a cohort of shares that are on average losers. The "base rate" probability suggests HE1 will be a loser 74% of the time.

If you look at the 0-20 bucket.. you can see that about 12% of similarly ranked shares go onto rise 50%+ and 6-7% of those shares do go on to double or more. The chart below cuts off at the 5 and 95 rank mark for legibility... there's a small fraction that do go onto multibag further to some very strong returns.

If you are right, you can make a lot of money on low ranked shares.. but these are lottery style odds. There are many stocks like this on the market.

You should come and hear my speech at Mello in Chiswick tomorrow... it's on these themes.

Mo Sparkle

23rd May '24

Thank you for your detailed response Mr Croft. I will pop in at Chiswick later. It was a shame to see such negative and personal comments from people who subscribe to Stocko to my original point. Their strong reaction is perhaps indicative of their general attitude to AIM and may represent one of the many reasons why stocks are on sale at the moment?

Rusty2

23rd May '24

Nothing to do with the AIM, as several people have already said, plenty of high ranked AIM stocks on here. In fact the top ranked stock is Serabi Gold (LON:SRB) which is an AIM miner. Metals Exploration (LON:MTL) is also up there,mp another AIM goldminer. Here you can check out others: https://www.stockopedia.com/in...

Edward Croft

24th May '24

I should have caveated my stats - as they are over long term averages.

In up trending markets all the deciles have higher win rates.

I would expect this year to see higher win rates in low (and high) ranking stocks.

StrawberryDreams

27th May '24

Has the company produced a profit and/or substantial and continuous revenue yet?It's all well sitting on a potential goldmine even in central London, especially as a junior miner without multiples of millions/billions on the balance sheet, if you don't have the money to get it out and start repaying some of that capital investment.Check out Sirius Minerals, taken over by Anglo American (LON:AAL.They're still having current finance issues one way or another (perhaps Anglo doesn't see the return it once did?) even with Anglo's massive balance sheet.https://www.thescarboroughnews...

You can obviously multibag on junior mining shares, especially in a bull market and with the right tailwinds.I remember Greatland Gold (LON:GGP), that did get lucky with financing, being on Hargreaves Lansdown (LON:HL.) 's top share purchases list for ages during the pandemic bullrun.Problem is knowing when to sell and getting lucky with when to buy.It's all timing and substantial luck.Greatland Gold (LON:GGP) 's share price currently is still way below its peak during its hype phase.Who knows, maybe it will recover to that peak again?That requires very specialist mining and financing of similar mining knowledge, even at their stage of development, including a lot of luck though imo.

kuronagi

27th May '24

Helium one is definitely a "bargepole" stock for me. Let me add a few points to those already mentioned (eg zero revenue and profit

1) one of the first things I look at with small companies is the list of major investors. I am looking for solid institutional names. HE

kuronagi

27th May '24

Helium one is definitely a "bargepole" stock for me. Let me add a few points to those already mentioned (eg zero revenue and profit

1) one of the first things I look at with small companies is the list of major investors. I am looking for solid institutional names. HE1 has none. The top 10 shareholders own only about 5% of the shares and are mainly individuals

2) The office address is 7 Bell Yard. As far as I can tell, this is just a serviced office and not an exclusive office for HE1

3) Only 6 employees!!!

None of these factors are damning in themselves but just add to a general picture.

Some of these "blue sky" resource companies can sound pretty convincing. Several years ago, I lost a substantial sum in an oil-explorer, Aminex, which has operations in Tanzania. And I am a pretty experienced investor being a retired analyst/head of research/head of regional research.

With small companies which have a following among private investors, possibly my first check (even before list of major investors) is the level of activity on bulletin boards such as ADVFN.

eyredan

27th May '24

I’m a LTH in Helium One Global (LON:HE1) (in since before first drill in 2021) and I do believe they could achieve big things. The bull case is quite easy to put together, i.e. world class resource, rising helium demand, hydrocarbon free etc. However, this is definitely high risk and Stocko is correct to give it a low rank – it’s not earning anything yet and this type of exploration stock usually is bargepole territory.

My experience since 2021 has certainty been a rollercoaster – my initial investment was pretty much wiped out on the disappointing drill and horrendous fund raise last year, however I bought more at the lows (0.2p) and 10-bagged in the following good drill results, making back my initial investment and a fair bit more. I expect much the same going forward – 2 steps forward (more drill results due Q3) and 1 step back (more fundraising). I do think HE1 could be massive, but tread carefully.

Wolf of Small Street

10th Jun '24

Placing after hours at a discount of 56.5 per cent. 0.5p. Directors scrape together 35k

"Proven multibagger"

kuronagi

10th Jun '24

I would be interested to know your take on today's fund raising announcement. You know my view on this stock (see May 27 comment). Has "Stocko completely misread this one"?

Kuronagi

littledavesab

16th Jun '24

Without looking I'm sure you could take a basket of AIM miners over 10 or 15 years and draw a chart that would have a more effective mine shaft than many of its constituents !

littledavesab

16th Jun '24

Having said that and the HE1 chart shows, the best way to deal with junior miners is to be able to trade them. That requires a different mental approach compared to dealing with more conventional shares.

Mo Sparkle

8th Jul '24

100 % up since my first post here on HE1.

Dragon

8th Jul '24

The price was 1.38p on May 22nd. I think you mean it's doubled since the low of 0.6p in June.

Lincs

8th Jul '24

Mo - I think you've got that wrong. According to Sharepad close SP on 22/5 (when you posted) was 1.375p and price to buy now is 1.32 - so that's a fall in price is it not?

eyredan

8th Jul '24

So, the rollercoaster ride continues. The price of the placing on 11^th June was another shock for holders, but it did represent a great buying opportunity – before the funding the price was around 1.3p and MCap around 49 mGBP, accounting for the dilution the new share price should’ve been 0.9p. However, the price actually dropped to close to the placing price (as often happens) and the company was actually in a much stronger position with funds secured for the upcoming EWT, so I loaded up with plenty of shares below 0.6p in the expectation it would return to at least 0.9p. This morning I sold nearly half my total holding at 1.4p, as starting to look overbought (RSI 73), but I’ll keep the rest of my shares for longer and might buy more if the price dips significantly.

While this high risk share is definitely not everybody’s cup of tea, for those interested the potential is huge. The P50 estimate of the recoverable helium resource is 138 billion cubic foot, and helium is priced at least 500 $/thousand cubic foot – making the prospective resource worth 69 billion dollars. Obviously that full value won’t ever be realised in the HE1 share price, but current MCap is around 62 mGBP so there is a lot of upside if the upcoming EWT confirms commerciality. Obviously, if EWT results aren’t good then this will drop like a stone, but it’s a risk-reward game, and the odds still look very favourable to me.

eyredan

7th Sep '24

Brief update for anyone interested – HE1 released initial results of the extended well tests (EWT) this week. Unfortunately, these were somewhat underwhelming due to relatively low flow rates. They still plan to commercialise the site and are now applying for a mining licence, but from my estimation the economics look OK rather than great, which was my hope due to the world-class helium reserve. I’ve made good profits by trading this share but have now completely sold out for the first time since April 2021.

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HE1 - proven multibagger

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About the Author

Mo Sparkle

27 comments

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