JOY was recommended by The Energy Strategist at $76.32 in Investment Digest issue 684, dated December 1, 2010.
“We are selling Joy Global, Inc. (JOY, NYSE). JOY has continued to sink, giving every indication that it’s a value trap rather than a bargain at the current levels. And the entire commodity space on which the mining-equipment manufacturer is heavily dependent is in bad shape as well.
“Recent turmoil in the credit and currency markets threatens to aggravate and prolong the economic slowdown in the emerging markets that have been the principal drivers of commodity demand. This is especially true for China, where the recent credit crunch, enforced by the country’s central bank, speaks to the leadership’s commitment to reform the economy even at the cost of much slower growth.
“Joy Global does have some positives, including a reasonable valuation and positive cash flow, which could be spent on share purchases early next year. But that’s too long for us to wait given the likelihood of slower global growth and further market turmoil in the near term. ... The upside seems much more modest than the downside in the medium term, and that’s a far more important consideration than the purchase price, always. Sell Joy Global.”
Igor Greenwald, The Energy Strategist, www.energystrategist.com, 800-832-2330, 6/24/13