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Energy Company Valuations Explode To Dot Com Bubble Levels
A few days ago we wrote that "Either Oil Soars Back To $88, Or Energy Stocks Have To Tumble By Over 40%." The basis for that analysis was a forward Energy Sector multiple which last week was just shy of 24X. It's time for an update because following today's latest surge in energy stocks, the most recent forward P/E multiple for energy companies is... well, see for yourself.
At 26X, this is the highest forward P/E multiple since the dot com boom, and at this rate of rising about 10x turns per month, may hit an all time high by the end of the month.
Indicatively, the long-term average P/E multiple for energy companies is just over 13x, which means that as of this moment, the market, in its infinite discounting wisdom, has already calculated and already priced in that the energy sector can easily double its forward earnings from their current depressed levels.
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Well, for what it's worth, at least I can understand the real value of consumable calories...
what are all those "dot coms" selling again?
clicks.
Last surge orchestrated by Wall Street players in order for them to offload their energy exposure before the dead cat bounce fades....
we must be close to a crash or a correction
This is a possibility.
No business can run well of ANY size if "suddenly my energy costs just doubled in one day."
They will continue to raise cash and put it in their wall if need be...convert into gold and silver, etc.
I think shorting energy is no different than shorting Amazon...tempting target...but tempting for all the wrong reasons.
That huge supply can meet an equally gigantic demand. "When the price falls the value of the energy goes up" does it not?
Certainly this is true of refined product.
The moves in currencies simply defy belief. Good luck handling that type of volatility.
It works BOTH ways. For example, no business can run well of ANY size if "suddenly my product sells for half of what it used to in one day..."
"half off sales" are basically "going out of business" sales...
My sentiment exactly, catch some dumb fuckers at the top again of course that will get burned beyond recoginition, wash--rinse and repeat.
Same as it ever was.
It was sure nice to see metals explode upwards today though with all the other...........right, nevermind, caught myself day dreaming again.
hey all those 10 year olds employed at Sri Lankan click farms have to eat something.
This morning on the radio, I heard about an app some college students developed to curb smartphone addiction. Think about that for a second. An app... to curb smartphone addiction.
http://sanfrancisco.cbslocal.com/2015/02/02/northern-california-students...
$10B valuation in one year, guaranteed.
Once again, any Technical study pre 2008 is all BS. Markets actually had somewhat true price discovery back then. Today, not so much.
Yes, the markets of today only resemble the markets prior to 2008 since we still seem willing to call this corporate-fascist arrangement a market.
An excellent observation.
Useless information, in a mostly useless society.
Evidently someone knows something about the crude oil price that we don't.
S u d d e n l y in August 2014 - like in 2007 - an apparent excess of supply over demand "materialized" . But like Jesse says (Cafe Americain), you have to know who the buyers and sellers are.
Fuck Wall Street, what a pack of lies.
I would jump for joy if the entire financial sector was nuked.
I would cry for the real people making the food and sweeping the floors; but I would rejoice at the vaporized carcasses of the hyenas, jackals, fleas, ticks, and tapeworms masquerading as human beings.
"I would rejoice at the vaporized carcasses of the hyenas, jackals, fleas, ticks, and tapeworms masquerading as human beings."
Did you make that up? It's good, you know. Very good.
Markets are pre-discounting a return to $88 oil.
Is it possible the energy markets were just interfered with by the fed to prevent further price deterioration in this sector? the potential of bankruptcy and bond defaults coupled with the massive layoffs that will accompany same, they're actually being somewhat proactive. it's $30 late, but it's about as proactive as the fed ever gets. The decline in price was $65 in 6 months, too quick for defaults to show up at fed member banks, so these problems may only now be popping up.
Bubbles don't end anymore.
When you own the money machine the party never ends.
Sucker rallies* should be expected in every beaten down sector .... fiat has no where else to go !
* also known as a muppet trap
Best trade of the year and it’s just februari!
Did PM stocks react the same way when gold/silver crashed in 2013 and beyond?
oil price will lift up when someone- east or west- will start to fall
good indicator is rosneft share
but this fwd p/e not realy sure
There are no more fair markets and true price discovery. Any attempt for the market to run free is met with CB manipulation. Therefore we have world wide markets with CB inflated assets. Hawkish = bullish, Dovish = bullish, Oil down = bullish, Oil up = bullish, etc... Just keep kicking the can.
Tradeworx accounts for about 5 to 6 percent of daily U.S. equitymarket.... Ever heard of them? You think we have a market based on fundamentals??
EAstward ho oil pipeline, all the way to Kesytone!
And Westward ho the future, all the way to China !
No stop at Hawai, as Nipponed Pearl harbour is now so much a faded and irrelevent memory, its been poured into oblivion by the American ode to Hiroshima.
The future lies where lies are truth, in a world of fiat.
Stefan Zweig said it best : we have killed civilization for a generation or more in the name of barbaric nationalism. Lets hope the sacrifice of our generation is not repeated after Hitler's Armageddon. (He committed suicide in 1942, having seen the beginning and didn't have enuff heart left in him -- a creature of WW1 destruction branded by it in his youth, carrying its scars into the 30s -- to see its end).
And he was talking of that last sunset of Europe, not the coming sunset of west.
It looks like a repetition is now programmed. By the kings of fudge finance.
Have to know how to look at the energy scams as there are no real markets anymore
The U.S. Is Helping China Build a Superior Nuclear Reactor
China Asks U.N. To Block Criticism of NGO’s
Russia Like The U.S. Wants U.N. to Manage Internet Infrastructure
Texas-based Schlumberger Buys 45% Stake In Russian Oil Driller
Russia Approves $2.3B For Finnish Nuclear Power Plant
ExxonMobil Joint Venture With Russia’s Rosneft Begins Production Offshore Russia
The Q1 energy sector earnings growth figures will be very interesting, me thinks...
...time to buy some Ag? hmmm