Three stocks to watch during Helium-3 boom


According to some, few issues today are as urgent as climate change. The world is aiming for a cleaner planet by 2050, and while alternative energies have made significant strides, imagine the potential of an infinite clean energy source.

Enter Helium-3. The catch? It's located about 400,000 kilometres away on the moon.

Despite this distance, nations like the United States, China, and India have set their sights on the moon, lured by the practical and financial prospects of Helium-3-potentially the modern-day equivalent of a gold rush.

three asx stocks ready to soar during helium-3 moon mining boom

Historically, some of the most successful companies during gold rushes were those who supplied the tools for mining.

This is where Australia comes into play. With our cutting-edge mining technology and strategic partnerships, we are uniquely positioned to be the tool supplier in this space race.

As the competition heats up, Australia's existing partnerships with space-faring nations position ASX-listed companies in the front seat. Here are three that are primed to benefit from this rapidly growing sector.

Electro Optic Systems Holdings (ASX: EOS)

Known for its advancements in satellite communication and space situational awareness, EOS is well-placed to benefit from increased investment in lunar missions. The stock has been on an upward trajectory since 2003 and is currently trading around $2.00.

The last time it hit this price level was in 2016 before it surged more than 500% in the following four years. If the price continues to climb and surpasses the March 24 high, the odds favour a potential repeat of its 2016 performance, which is very exciting.

Silex Systems (ASX: SLX)

Known for its uranium enrichment technology and exploration in nuclear fusion, which could be adapted for Helium-3, SLX is positioned at the forefront of the energy revolution.

Despite a rise in the share price of more than 3000% since 2020, SLX is still trading at less than half of its all-time high of around $13, which indicates there is significant potential for growth.

Quickstep Holdings (ASX: QHL)

QHL manufactures advanced composites and components for the aerospace and defence industries and is set to benefit from future space investment. Currently, the share price is trading around $0.20, making this stock quite illiquid.

However, it's worth noting that both EOS and SLX once traded at similar levels before taking off.

As such, I would encourage you to watch for a break above $1.00 as this could attract a rush of new investors, increasing liquidity and offering a promising opportunity to invest in a stock with astronomical upside potential.

If you're interested in investing in the space race, keep an eye on these stocks. They have the potential for substantial growth in this expanding sector.

What are the best and worst-performing sectors this week?

The best-performing sectors include Energy, up more than 4%, followed by Materials, up more than 3% and Real Estate, up more than 1%. The worst-performing sectors include Utilities and Information Technology, down more than 1%, followed by Communication Services, down just under 1%.

The best-performing stocks in the ASX top 100 include Whitehaven Coal, up more than 16%, followed by Lynas Rare Earths, up more than 9%, and Mineral Resources, up more than 7%. The worst-performing stocks include Pro Medicus, down more than 9%, followed by Seek Limited, down more than 5%, and Cochlear, down more than 4%.

What's next for the Australian stock market?

July has kicked off with a bang! The All-Ordinaries index has increased by just under 1% this week, and I'm excited because this is the first time since mid-May that our market has consecutively hit new weekly highs.

This upward trend suggests the market may finally be ready to break out of the current sideways move.

Looking ahead, if the market continues its upward trajectory next week and surpasses 8100 points, it would be reasonable to target the current all-time high of 8168. On the other hand, if the market reverses and falls below 7900 next week, it would signal the need for caution, resulting in the potential for a significant downward shift.

Be prepared for either scenario. It is not uncommon for prices to spike up and down following prolonged sideways periods before eventually creating a directional trend.

That said, I am still bullish. Last week, I mentioned that a rise in the materials sector would strengthen the market's upward momentum, and we're seeing this unfold, with the materials sector rebounding strongly from the 17,000 level this week.

Additionally, the energy sector has had a stellar week, posting one of its best one-week performances in recent history.

So, with both energy and materials gaining traction and financials maintaining their strength, the conditions are ripe for future growth.

Therefore, if you haven't positioned yourself yet, now is the opportune moment. The alignment of these key sectors suggests the potential for achieving your best returns this year.

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Dale Gillham is chief investment analyst at Wealth Within Limited (AFSL 226347). He also serves as the head trainer at the Wealth Within Institute (RTO 21917). He has more than three decades of experience in the investment industry, and is the author of How to Beat the Managed Funds by 20%, Dale's qualifications include an Advanced Diploma and a Diploma of Share Trading and Investment. He co-hosts the Talking Wealth Podcast, and his work has appeared in The Australian Financial Review, New York Business Journal, Wall Street Select and more.