BOSTON (TheStreet) -- Bucyrus International (BUCY) was upgraded by TheStreet.com to "buy" on Nov. 23, and shares of the mining-machinery company rose to a 52-week high on Jan. 8. But Bucyrus is volatile, so it tends to magnify stock-market movements, including the January pullback. Bucyrus is down 5% this year. Is it time to enlarge a position or move on?

Bucyrus is still attractive. Third-quarter profit increased 43% to $92 million, or $1.21 a share, as revenue climbed 4.6% to $676 million. The company's operating margin widened from 16% to 21%. Return on equity, a measure of profitability, narrowed from 25% to 23%, but still beat the industry average of 6.8% and the

S&P 500 Index

average of 3.3%. During the past three years, Bucyrus has increased revenue 57% annually, on average.

Since the year-earlier quarter, Bucyrus has more than doubled its cash balance to $144 million as debt declined marginally to $516 million. But a pending deal to purchase the

Terex

(TEX) - Get Report

mining business will cost Bucyrus, assisted by a group of financial institutions, $1.3 billion of cash. The deal will strengthen the product portfolio, and Bucyrus estimates $100 million in operating synergies by 2012. Terex makes hydraulic excavators, surface-mining trucks and drills, among other things.

Ostensibly, Bucyrus's stock is expensive. Its 3.1 book-value multiple, 1.4 sales multiple and 19.2 cash-flow multiple represent premiums to the machinery group. Yet the shares are cheap when considering trailing and projected earnings. And Bucyrus's PEG ratio, a measure of value relative to growth, is low at 0.5. By comparison, the industry average is 5.4. Bucyrus soared 271% during the past year, beating indices and meriting a performance score of 9.2 (out of 10) from our quantitative equity model.

Of 16 analysts surveyed by

Bloomberg

, 11 recommend purchasing Bucyrus and five suggest holding its shares. None advise selling the stock. The most bullish price target is $87, implying a 60% upside. The model projects a price of $68.75, leaving a 27% return on the table.

Bucyrus, which receives a volatility score of just 3.2, was a model of consistency during the recession. It achieved earnings per share growth in every quarter. Admittedly, performance was bolstered by acquisitions. But the so-called beta risk of this stock is notably deceptive. The model gives Bucyrus a financial-strength score of 7.9 and a growth score of 9.2. Both figures are higher than "buy"-list averages, placing Bucyrus in our top 200 stocks.

-- Reported by Jake Lynch in Boston.