Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- Joy Global
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 45.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- JOY GLOBAL INC has improved earnings per share by 34.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, JOY GLOBAL INC increased its bottom line by earning $5.92 versus $4.40 in the prior year. This year, the market expects an improvement in earnings ($7.22 versus $5.92).
- The debt-to-equity ratio is somewhat low, currently at 0.70, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
- JOY has underperformed the S&P 500 Index, declining 21.77% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- Net operating cash flow has significantly decreased to $104.80 million or 59.19% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
Joy Global Inc. engages in the manufacture and servicing of mining equipment for the extraction of coal, copper, iron ore, oil sands, and other minerals. The company operates in two segments, Underground Mining Machinery and Surface Mining Equipment. The company has a P/E ratio of 8.3, below the average industrial industry P/E ratio of 8.6 and below the S&P 500 P/E ratio of 17.7. Joy Global has a market cap of $6.01 billion and is part of the
industry. Shares are down 25.9% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.