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Joy Global Inc. (JOYG) Breaks Upward

Sep 20 2010

Joy Global Inc. (JOYG) Breaks Upward

Joy Global is involved in the manufacturing and servicing of farm and mining equipment world-wide. Their equipment is used to mine coal, copper, iron ore, and many other minerals. Base out of Milwaukee Wisconsin, the company has performed well over the past four months while recently breaking out of a year long trading range.

The company is a member of the S&P 400 MidCap index and has a market-cap slightly over $7 billion. If you invest in Joy Global (JOYG) you will receive a dividend with a yearly yield of 1.10% on top of any appreciation the equity experiences.

The company will report their current quarterly earnings on December 15th and has surprised the market their past four reports. The company most recently beat earnings expectations by 49% when they announced $1.15 profit per share for the quarter ending in April. Analyst now expect $1.03 for the current quarter and $1.15 for next quarter. Both of these expectations have been raised over the past 30 days.

At a price to earnings ratio (P/E) of 15.88, the stock trades at a PEG of 1.52. This higher than is traditionally accepted from investors looking for value. Sales have decreased by 5.6% this year compared to last year while earnings have reduced by a similar percentage.

Mid-way through September, Jim Cramer of the Mad Money television show on MSNBC, mentioned Joy Global as one of the stocks to watch as China has turned the corner on their mild recession and will resume double-digit growth. Machinery companies such as Bucyrus, Joy Global, Caterpillar, and Freeport McMoRan (FCX) should enjoy increased sales to the economic powerhouse.

Options for the stock are not heavily traded but there was some buying in the 70 and 75 strike Calls for October today as the stock itself rallied almost 2.5%. The trend for the stock chart of Joy Global is bullish with a recent buy signal occurring as the stock passed $62.75 on it’s way to $70. You can purchase shares around the support line of $66.15 hoping for a bounce to new highs over the coming weeks.


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