What is the best time to use my hero tokens?

This is a tough decision, but really is up to you. S heroes will need several duplicates in order to fully upgrade them so if you already have strong orange heroes then getting an S1 that you cannot at least awaken may be a bad ideas is it will not be useful to you yet.

On the other hand if it is a good hero that matches your requirements and you will want to use it in future then getting it now will be a good start and you can try to gain more tokens to get yourself a duplicate in future.