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Joy Global, Inc. Message Board

  • scopeoutthemonster scopeoutthemonster Mar 12, 2008 1:42 PM Flag

    Any IBD readers here yet ???

    - You may remember me from (HANS)"MonsterEnergy"(TM) 2003-6 100bagger.
    - I am interested in hearing thoughts about fundamentals/technicals/& intangibles regarding your investment choice ..
    - I remember when (JOYG) was in the IBD-100 tripling & doubling due to accelerating eps ..
    - It seems to me that we are about to begin another eps acceleration period ..
    - Growth in orders along w/expanded capacity on three continents suggests that (JOYG) will be able to meet demand & accelerate eps growth again ...
    - It also looks like (JOYG) will come out of a multi-year cup shaped base (perhaps w/a handle) which is a highly profitable technical pattern ..
    - I am suprised to see that most of the posting on this message board is spam .. hate those spammers .. anyway .. where is everybody ? ... Are the institutions the only ones here in #'s so far .. ?
    - If so .. then we have a mighty fine ride ahead ..

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • - There it is again .. a couple of back to back 20k share buys popped the price back up .. Institutions are definitely buying (JOYG) on dips ..
      - In a really poor mkt day (JOYG) has held up nicely at the 13dema after even setting a new all time high in the AM .. I am fine w/bouncing along the 13dema while the overall mkt tests the lows ... In a week or so we will see some really nice gains in (JOYG) as the 50dema moves up .. & the upper Bollinger moves up ..

    • (CONTINUED from part 1)
      - part 2:
      -
      Rising Higher

      Coal is still a bargain compared with natural gas, which is around $12 per million British thermal units, up from $2 a few years ago.

      But coal prices have been rising the last several months, giving coal companies the means and incentive to invest in capital equipment.

      Several factors contribute to the price hikes. One is high demand from utilities. Others are low coal inventories and disruptions in U.S. rail transport, which have held up coal shipments in the U.S.

      Much of the world's coal supply comes from eastern Appalachia and the Powder River Basin in the West. About half of Joy's coal-equipment sales are to U.S. customers.

      In gauging prices, S&P's Hingher looks to coal producer Arch Coal as a barometer. Arch fetched $15.03 per ton on average in 2004, up 17% from 2003. Hingher estimates Arch will get nearly $17 per ton this year. He figures prices will go up another 13% in 2006.

      One of Joy's biggest problems is keeping up with demand.

      "We have not seen activity levels like this - project plans, discussions, requests for proposals, bids and orders - for more than 20 years," Chief Executive John Hanson told analysts in a recent conference call. He was unavailable for comment.

      Snags in Joy's supply chain for such things as bearings, forgings and castings have held up fulfillment of some customer orders, he said during the call.

      The company is working to correct the problems. It's in the process of doubling the number of casting suppliers. And it's building new fabrication capacity in China to meet increased demand for new mining gear there.

      Joy's current situation is a far cry from five years ago, when it sank into bankruptcy under its former name, Harnischfeger Industries.

      The company was hurt by falling coal prices during the '90s, coupled with a pricey acquisition of a paper-industry equipment company that subsequently faltered.

      When it emerged from bankruptcy in 2001 with a more upbeat name - Joy Global - management set about to restructure the company. It focused on two main divisions: Joy Mining Machinery for underground mining and P&H Mining for surface mining.

      While coal is Joy's main focus, 15% to 20% of revenue comes from copper-mine equipment. Copper also has had strong growth.

      The coal cycle still has plenty of steam left, analysts say. Some see positive trends through 2008. Of the three typical stages in the cycle, coal is in the second phase, says analyst Gallo. The third stage would come with openings of new mines, which have been minimal.

      The wild card is commodity prices, Gallo says. If they fall, Joy's business could stumble.

      Gallo doesn't sound too concerned.

      "Even if natural gas went down to $7 or $8, coal would still be very attractive," he said.

      Analysts surveyed by First Call estimate Joy's earnings will grow 191% this year to $1.98 a share. They see 2006 profit rising 38% to $2.73.

    • - Conditions that led to (JOYG)'s earlier 10bagger have returned ..
      - Read this retro IBD article:
      Article Title: "Joy Global Mines New Sales From Strong Coal Industry "
      Author: MARILYN ALVA
      Section: IBD 100
      Date: 10/4/2005


      Soaring prices of natural gas have made coal the fuel of choice for powering electric plants.

      More than 50% of U.S. electricity generation is fueled by coal, a cheaper alternative to natural gas. The trend is expected to continue, thanks in part to a new federal energy bill that includes incentives for cleaner coal production and coal-gasification projects.

      The Energy Department reports that more than 100 new utility plants in the construction pipeline will be fueled by coal. That's just about the entire lineup.

      Meanwhile, insatiable demand for coal from China, India, Russia and other emerging markets has put a strain on supply. Coal mining firms are stepping up efforts to extract more coal from their mines - fast.

      That's happy news for Joy Global, a leading mining-equipment firm.

      "Capital spending by mining companies has accelerated," said John Hingher, industry analyst for Standard & Poor's. "So it's pulled up a lot of demand for services and materials (to support mining)."

      Joy Global sells surface and underground mining equipment. It has a 70% share of the world's coal-equipment market, says analyst Michael Gallo of C.L. King & Associates.

      The company has seen double-digit revenue gains the past eight quarters. Profit has risen even faster during most of those periods.

      Joy's year-over-year earnings nearly tripled to 57 cents a share during the fiscal third quarter, which ended July 30. Revenue was up 37% to $523 million.

      Demand for new equipment is partly the result of a spending lag during the 1990s, when U.S. coal-mine operators put off buying equipment as they worked through overcapacity issues.

      Today there's "massive pent-up demand" for mining equipment, says Tomas Giovine, president of Giovine Capital Group, a hedge fund that's been buying Joy shares. He expects Joy's business to be sold out for the next two years.

      "It's without a doubt one of the most attractive energy plays right now," Giovine said.

    • coop:___Dig this buddy..!________:
      -
      We Dig This Mining-Machinery Maker's Fast Growth

      By Jack Hough
      March 12, 2008
      THE STOCK MARKET this year hasn't shown favoritism toward fast-growing companies. Shares of companies that have grown profits by an average of 30% in recent years and are expected to do the same this year are down an average of 9% — about as bad as the broad market. That makes sense; fast growers tend to trade at high price/earnings ratios, so even if their earnings remain strong in a downturn, investors might become less willing to pay up for those earnings.

      Some fast growers are resisting the gloom nicely, though. Consider Bucyrus International (BUCY1), a maker of giant earth-moving machines. Its stock is up 62% since this column last recommended2 it in May. The S&P 500 index has fallen 13% during that time.

      American-made goods are on sale from the perspective of foreign buyers, due to the plunge in the dollar's value. But Bucyrus's stock is beating the market by a much wider margin than shares of, say, Caterpillar (CAT3) and Terex (TEX4). That's perhaps because those companies make cranes and such that are primarily used for big construction projects. Commercial building has held up much better than home building, but is expected to slow as America's economic downturn drags on. Bucyrus, meanwhile, makes mining machines, which are in seemingly endless demand right now.

      Bucyrus makes about half its money above ground and half below it. Surface equipment includes dragline excavators used to scoop up rocks, electric shovels for shoving rocks and rotary blasthole drills for breaking rocks apart. Underground products include continuous miners used to chew caves open, longwalls used to keep them open and belt systems for carrying out the broken-up bits. Barely more than a third of sales last year were made to U.S. customers. Bucyrus has a hand in copper, oil sands, gold and ore, but about three-quarters of its sales are related to coal.

      Coal generates 40% of the world's electricity. Demand is expected to hit 7.2 billion tons a year by 2030, up from 4.1 billion tons in 2005. Most of the increased usage will come from China and India, according to industry forecasters. That will require more dragline excavators, the enormous machines that can weigh more than 3,000 cars and cost $120 million. It will also mean old ones will have to be rebuilt or replaced. The average one lasts 40 years. Bucyrus has an installed base of more than 400 of them with an average age of 29. About half of sales come from parts and service, which carry meatier margins than new equipment orders. Of the $2.4 billion in sales the company is expected to ring up this year, $1.1 billion worth had already been ordered at the start of the year.

      The stock has reached 28 times last year's profit, making it nearly twice as dear as the broad market. But Bucyrus's growth prospects make the stock seem a good deal. Wall Street expects the company to boost its profit 31% this year and 27% next year. Those numbers and others earned Bucyrus a spot on our Fast Growth screen. Run the search anytime you like using SmartMoney's stock screener5 and the full list of criteria6. It recently produced eight7 names in total.


      Jack Hough is associate editor at SmartMoney.com and the author of "Your Next Great Stock8."
      -
      Search for this at www.smartmoney.com
      - My link won't help you because I have the premium service which all of you would have to log into w/passwords.

    • coop:___Dig this buddy..!________:
      -
      We Dig This Mining-Machinery Maker's Fast Growth

      By Jack Hough
      March 12, 2008
      THE STOCK MARKET this year hasn't shown favoritism toward fast-growing companies. Shares of companies that have grown profits by an average of 30% in recent years and are expected to do the same this year are down an average of 9% — about as bad as the broad market. That makes sense; fast growers tend to trade at high price/earnings ratios, so even if their earnings remain strong in a downturn, investors might become less willing to pay up for those earnings.

      Some fast growers are resisting the gloom nicely, though. Consider Bucyrus International (BUCY1), a maker of giant earth-moving machines. Its stock is up 62% since this column last recommended2 it in May. The S&P 500 index has fallen 13% during that time.

      American-made goods are on sale from the perspective of foreign buyers, due to the plunge in the dollar's value. But Bucyrus's stock is beating the market by a much wider margin than shares of, say, Caterpillar (CAT3) and Terex (TEX4). That's perhaps because those companies make cranes and such that are primarily used for big construction projects. Commercial building has held up much better than home building, but is expected to slow as America's economic downturn drags on. Bucyrus, meanwhile, makes mining machines, which are in seemingly endless demand right now.

      Bucyrus makes about half its money above ground and half below it. Surface equipment includes dragline excavators used to scoop up rocks, electric shovels for shoving rocks and rotary blasthole drills for breaking rocks apart. Underground products include continuous miners used to chew caves open, longwalls used to keep them open and belt systems for carrying out the broken-up bits. Barely more than a third of sales last year were made to U.S. customers. Bucyrus has a hand in copper, oil sands, gold and ore, but about three-quarters of its sales are related to coal.

      Coal generates 40% of the world's electricity. Demand is expected to hit 7.2 billion tons a year by 2030, up from 4.1 billion tons in 2005. Most of the increased usage will come from China and India, according to industry forecasters. That will require more dragline excavators, the enormous machines that can weigh more than 3,000 cars and cost $120 million. It will also mean old ones will have to be rebuilt or replaced. The average one lasts 40 years. Bucyrus has an installed base of more than 400 of them with an average age of 29. About half of sales come from parts and service, which carry meatier margins than new equipment orders. Of the $2.4 billion in sales the company is expected to ring up this year, $1.1 billion worth had already been ordered at the start of the year.

      The stock has reached 28 times last year's profit, making it nearly twice as dear as the broad market. But Bucyrus's growth prospects make the stock seem a good deal. Wall Street expects the company to boost its profit 31% this year and 27% next year. Those numbers and others earned Bucyrus a spot on our Fast Growth screen. Run the search anytime you like using SmartMoney's stock screener5 and the full list of criteria6. It recently produced eight7 names in total.


      Jack Hough is associate editor at SmartMoney.com and the author of "Your Next Great Stock8."
      -
      Search for this at www.smartmoney.com
      - My link won't help you because I have the premium service which all of you would have to log into w/passwords.

    • coop:
      - Thanks for the heads up ..
      - I have actually owned (ACI) on & off since the earliest days of the current coal boom ..
      - Was an early investor around 2000-2001 time period .. I had Calpine during its sweet spot as well & exited at a good time .. Those were the early days of gasoline going from $.70 to $2-$3 .. So all sorts of Energy Plays were surfacing .. I didn't trust Energy as much though because I very much remember the late 70's/early 80's energy bust .. I (PTL) exited Amerex Oil when they showed a profit from selling drilling equipment because I saw that as not a good sign .. sure enough they went bankrupt & I received bankruptcy papers for about 10 years .. ! .. but PTL I was out & into Robotics as an early investor before the oil bankruptcies & rode the New Industrial Revolution in Robotics which was triggered by Ronald Reagan's Tax Act .. incl:__Accelerated Depreciation Schedules & Investment Tax Credits which encouraged America to re-industrialize w/advanced robotics & other sorts of electronics .. That set off the 80-'00 Tech Stock boom ..
      - I made a better choice in 2003 though as an early investor in (HANS) which turned into a 100bagger versus the 5bagger which (ACI) was over the 2003-6 time period ...
      - So right now I see a quick 12mo triple that would set me up w/cash for the next leg of whatever is taking off in 2009 .. (JOYG) is right in a sweet spot .. It may come back & form a handle on this 2 year base (if whats already happened does not qualify - I need to research) but nevertheless .. It is both technically & fundamentally in a sweeter position than (ACI) as far as valuation is concerned .. but I agree that can/will change once (ACI) is done w/its 2 year base ..
      - If you think about it .. Coal prices will encourage mines to be opened/re-opened at a faster pace which will encourage more equipment orders & (JOYG) has an opp to peak out capacity on its new plant expansions & add more if needed via cash from operations ..
      - Cash Flow should be huge in coming months ..
      - The thing to do will be to watch stock performance between the equipment makers & coal providers .. IMHO the biggest coal profits will come after they get more equipment & re-open/open more mines .. The same thing is going on in NG-Natural Gas .. The NatGas co's are leveraged to their eyeballs & diluting eps in an effort to acquire/open more mines .. & investors know that .. So it has held back share prices ..
      - I do see that (ACI) could breakout of a 2 year base in the not too distant future though ..
      - BTW:__During the California Gold Rush .. the folks digging for gold did not make near as much as the folks supplying picks & shovels .. I have seen this to be true in every gold rush since .. You may see mining co's in China paying bonus/premiums for early equipment deliveries . This is already happening at asian steel co's who can't make steel because there is not enough coke ...

    • with all due respect.. if you want eps acceleration (as in the old CANSLIM) the coal *miners* will experience much stronger eps acceleration than the equipment manufacturers

      one example... ANR mining costs are at $50 a ton for the last several year.. they sold coal last year for about $60 a ton on average for a $10 margin - then subtract taxes, depreciation, etc and these guys are only making $5 a ton or so.. razor thin margins

      you posted the new estimated contract prices for thermal and met coal... subtract that same $50 cost per ton from new contract prices of $110 and higher and you get $60 margins minus taxes and depreciation for a net profit of $40 per ton

      $5 a ton profits become $40 a ton profits for an 8x increase - at CURRENT market prices for coal

      JOYG cant do that.. BUCY cant do that.. while they are fine investments - they simply dont have the earnings acceleration that the coal companies will over the next 18 months.. I will admit that the technicals on their charts (JOYG and BUCY) are better if you are playing them for the very short term

      ANR, ACI, CNX are the top 3.. with ANR being the clear leader for 2009 because it is the #1 US exporter of coal


      you can see my fundamental information on the ANR board if you are intrigued

    • - Oops..!
      - ..Message Board etiquette requires that we all post our links:
      http://www.fool.com/investing/general/2008/03/11/when-backlogs-are-joyous.aspx
      - MY SUGGESTIONS:
      - Extrapolate recent eps performance from recent revenue growth & you can see why I can see accelerating eps coming .. !
      - The most important factor/characteristic in stocks that tend to go on to double/triple/quadruple .. is accelerating eps growth .. !

    • Investor's Business Daily
      IBD's Top 10 - Thursday
      Thursday March 6, 6:52 pm ET
      Investor's Business Daily
      -
      Joy Global Up On Coal Demand

      10 The mining equipment maker met Q1 profit views for a 27.5% rise to 65 cents a share on rising coal prices and strong int'l demand. Sales rose 14% to $640.3 mil, over views. Orders grew 54% to $870 mil. Joy Global (NasdaqGS:JOYG - News) raised its '08 EPS outlook to $3.15-$3.45 vs. views of $3.35. It also sees '08 revenue above views. Its shares rose 5%.
      http://biz.yahoo.com/ibd/080306/top10.html?.v=1http://www.crosswalk.com/
      - Since no one much seems to be here yet .. & I think that there may be a lot of new investors arriving if/when we breakout above the previous all time highs & keep running .. then I will accumulate some articles under this topic for new arrivals to read.

      • 1 Reply to scopeoutthemonster
      • - It feels a little spooky being here alone .. There hasn't been a 3-st*r or better rating on a post since Jan.28th .. ! .. Shazam .. !
        - So over time I will accumulate some of the best & most recent articles & link them together under this topic .. It will help a lot once investors start to arrive ..
        - IMHO this stock has the potential to triple over the next 12 months, rest, double, rest, & double again .. or better ... Something like what it did in 2003-6 ..
        - I remember cashing out of (HANS) in 2006 & looking for potential new investments & I liked (JOYG) but felt like it was going to have a late stage base failure as (HANS) had during the Summer .. That late stage base failure did occur .. So I was glad to be out of it .. I actually avoided all natural resources related stocks .. & picked (NVEC) which proceeded to increase 50% in short order & I exited that stock near its high .. It has been tough ever since .. to make $ ... We had the China scare after all that in 2007, & rumblings of an impending housing/mortgage crisis .. A bear mkt was coming .. Difficult environment ..
        - I suppose that the folks who made the big (JOYG) $ in 2003-6 are long gone but have not returned en'masse .. However, it looks to me like (JOYG) is preparing for its next multi-year run if it can successfully navigate a launch out of this base on convincing volume ..
        - I have already seen really nice institutional buying as did occur this morning & resulted in a nice pop .. Around mid-AM some institution bought 400k shares for $28M or so .. It will not take many institutions like that to triple this stock over 12 months especially since shares are limited & the shares authorization was voted down .. aka: no dilution ahead ..
        - This will turn into a supply & demand story which is always what really drives share prices ..
        - I feel pretty good about the supply v. demand story .. I have been burned in 2006-7 by secondary offerings which dilute eps .. or were sold w/hype .. The fact that this CFO resigned after shareholders voted down increasing authorized shares gives me much excitement & appreciation of the power of current shareholders to control mgt actions .. in favor of shareholders .. This company will not be able to dilute eps for multiple years the way that CHK-Chesapeake Energy did .. Also .. since they cannot split shares .. Retail investors & shorts will be blocked from entry as the share price advances .. Only institutions will be able to afford the triple digit share prices .. This will keep out the Cramericans who I also despise .. They will not be able to afford more than 100 shares at $100+. This will keep the Cramerica manipulators out of this game .. PTL .. ! ... Low share prices w/large #'s of shares lend themselves to manipulation & short selling. We will have more & more immunity from that problem & IMHO we will be trading at $210 plus this time next year ..

 
JOY
11.71+0.22(+1.91%)Feb 5 4:02 PMEST