Joy Global Inc. Stock Buy Recommendation Reiterated (JOY)

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 ( TheStreet) -- Joy Global (NYSE: JOY) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 19.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Machinery industry average. The net income increased by 23.3% when compared to the same quarter one year prior, going from $172.35 million to $212.56 million.
  • Net operating cash flow has increased to $205.59 million or 27.69% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -19.08%.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.84 is somewhat weak and could be cause for future problems.
  • 35.30% is the gross profit margin for JOY GLOBAL INC which we consider to be strong. Regardless of JOY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JOY's net profit margin of 13.32% compares favorably to the industry average.

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. It operates in two segments, Underground Mining Machinery and Surface Mining Equipment. Joy Global has a market cap of $6.64 billion and is part of the industrial goods sector and industrial industry. The company has a P/E ratio of 8.8, below the S&P 500 P/E ratio of 17.7. Shares are down 1.4% year to date as of the close of trading on Wednesday.

You can view the full Joy Global Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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