Morningstar Rating

Stock Research and Analysis

by Kwame Webb, CFA

Bulls Say

Recent bad-debt challenges at Chinese mining competitors Sany and Zoomlion could open the door for Joy to gain additional market share in China, a country that produces 50% of global coal and 30% of global iron ore output.
Joy’s emphasis on offering lifetime equipment management programs should increase its base business of aftermarket service sales.
The LeTourneau and Mining Technologies International deals smartly expand Joy’s product offerings into loading equipment and hard-rock underground mining. Read more 

Bears Say

Roughly 60% of Joy’s sales are tied to coal mining, which faces severe regulatory headwinds in the U.S. and China.
Caterpillar’s Bucyrus acquisition and captive financing arm give it the unique combination of the world’s broadest product portfolio and the ability to offering financing incentives, which Joy cannot offer. We think this gives Caterpillar the upper hand in sales.
As commodity demand has receded, Joy’s customers have insourced a larger portion of their equipment servicing. Read more 

Management

We give Joy Global a Standard Stewardship Rating. It has maintained relatively high returns on invested capital (greater than 10% by the end of 2014) despite a 35% revenue decline during 2012-14. We are also impressed that the company has managed to   Read more 

Profile

Milwaukee-based Joy Global manufactures electric shovels, dragline excavators, drills, and other mining equipment for use in surface (through its P&H brand) and underground   Read more 

Undervalued Shares for a Top-Shelf Insurer 
Watch more 

Premium Membership

View all of our analyst reports with a free trial to Morningstar.com Premium.