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It's been awhile since we've seen mania in resource stocks.
But two examples these last few weeks look like just that.
Last week, liquefied natural gas technology provider Chart Industries jumped 13% in a day, after announcing a contract for a facility build with Noble Energy in Colorado.
This in itself isn't bubble-like. But it starts to look more so when you combine it with Chart's recent share price performance.
The stock has doubled over the last nine months. Now standing at a towering 47x P/E on 12-month trailing earnings. A day of double-digit gains on top of such rapid growth thus starts to look somewhat frothy.
If there was a resource sub-sector ripe for bubbles, it would be LNG. The sector has lately come into vogue, after announcements of ambitious plans for LNG export projects in the U.S.
To be sure, there are good opportunities in American LNG. Every bubble starts with a grain of truth. And based on the valuations in the sector, it looks like expectations are getting well ahead of financial reality as we know it today.
It's striking that this performance comes at exactly the same time as another mania-like stock performance has unfolded in the resource sector: that of nuclear fuel manufacturer USEC.
USEC's share price exploded over the last two weeks. Going from $3 to as high as $29.
No explanation is apparent for the burst. The company has not released news, nor provided any speculation on the reasons for the gain.
It may turn out to be something else, but it certainly looks like manic buying.
These two events could be coincidence. Or perhaps a subtle comment on where the resource markets are at. Certainly more excitement than we've seen for quite some time in the space.
Here's to good old-fashioned boom times,
Dave is Managing Geologist of the Pierce Points Daily E-Letter.