FINANCE

UNEXPECTED

This trend could have a significant impact on your kid's birthday parties.

MATT MCALL

We're taking a break from the usual market craziness and negativity to talk about something you may not expect - Balloons. That's right, folks. Helium-filled balloons could be the next product that's hard to come by.

But there's a bigger trend at play here, and I'll tell you all about it.

The University of Nebraska is ending an 80- year tradition of handing out red balloons at its first home football game because of a shortage of helium supplies.

I always enjoy when I can write about two of my biggest passions – the stock market and sports. The University of Nebraska has a special tradition. When its team scores the first touchdown of the football season, red balloons are released from the crowd. But for the first time in 80 years, the school isn't providing those balloons.

That announcement didn't grab my attention at first. It's different, but traditions change. But then I read into why this was happening – because of a global helium shortage – and it made me remember a story I read about two months ago.

Helium isn't a topic that comes across my desk or mind often. And I wasn't fully aware that it's the second most plentiful element on Earth behind hydrogen. Helium is important for a number of industries ranging from health care to technology, welding, and even space exploration. The U.S. is the leader in supplying helium, and its two biggest competitors – Qatar and Algeria – are far from offering a stable global supply. Helium supply was expected to increase after Russia opened a new processing plant in 2021. But due to the ongoing conflict between it and Ukraine as well as issues at the plant, the facility has since been shut down.

In the meantime, demand has only continued to increase. Demand for helium is currently around 32,000 tons per year, which is about 10X the amount that the Earth produces naturally. And there's an even bigger issue.

The U.S. government has the only helium storage facility in the world – and it's expected to close up shop by the end of this year. Private companies will have to pick up the supply gap. And that will lead to some interesting investment opportunities.

I'm not making any recommendations in this space just yet but there are a few companies that could be worth adding to your watch list. Three industrial gas production giants – Air Products and Chemicals (APD), Linde (LIN), and L'Air Liquide (AIQUY) – have ties to helium and could be ready to profit from the shift in supply amid increasing demand.

Some smaller companies are also trying to take advantage of the situation. Avanti Energy (ARGYF) is a tiny $54 million business that's exploring and hoping to produce helium in North America. First Helium (FHELF) is even smaller at $29 million, and it has its sights set on Canada. Then there's Desert Mountain Energy (DMEHF), which is larger at $176 million. It's also in the exploration process with plans of producing helium and rare earth gases in the United States.

Today, the three industrial giants are in a much better position to profit from the helium shortage as the U.S. government moves out of the industry. While it may not be that way forever, the smaller companies I mentioned are pure speculation and far too risky for investors at this time.

Now remember that these stocks are not recommendations. My goal here is to educate you on the trends unfolding in the market and share some of the key players that could have the biggest impact in the years ahead.

For now, I'm simply watching the helium space. Meanwhile, I suspect the fans watching the University of Nebraska's football games this upcoming season will miss those red balloons.