Joy Global (JOY) Stock Plummets on Commodity Weakness
NEW YORK (TheStreet) -- Joy Global (JOY) stock is plunging by 15.64% to $15.96 on heavy trading volume this afternoon, as disappointing China data cause prices of commodities from steel rebar to cotton to tumble.
Joy Global is a mining equipment manufacturer based in Milwaukee. The slump in commodity prices has hurt consumer spending, and weighed on companies such as Joy Global and rival equipment manufacturer Caterpillar (CAT).
Prices of commodities are retreating from last month's rally as investors focus more on recent data rather than expectations for an economic stimulus and industrial reforms within China.
Steel futures have plunged the most since trading began in 2009 as inventories have risen, while iron ore in Dalian tumbled as much as 7.1% on data indicating that port stockpiles grew to the highest level in more than a year, Bloomberg reports.
Cotton fell by 1.5% after China unloaded supply from its reserves, and copper dropped by 2.1% after the country's imports pulled back from a record.
"Investors are looking at fundamentals more closely now," Zhang Yu, a senior analyst with Yongan Futures, told Bloomberg. "While inventories were built up with the price surges, recent data couldn't convince people that China's real economy is bottoming and going to bring demand back."
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
Joy Global's weaknesses include its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
You can view the full analysis from the report here: JOY
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
