Joy Global Inc. Stock Hold Recommendation Reiterated (JOY)

NEW YORK ( TheStreet) -- Joy Global (NYSE: JOY) 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 attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.48, 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 0.94 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 13.34% compares favorably to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Machinery industry average. The net income has decreased by 15.0% when compared to the same quarter one year ago, dropping from $213.59 million to $181.56 million.
  • Net operating cash flow has significantly decreased to $0.41 million or 99.60% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, JOY GLOBAL INC has marginally lower results.

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 $5.2 billion and is part of the industrial goods sector and industrial industry. The company has a P/E ratio of 7.00, below the S&P 500 P/E ratio of 18.00. Shares are down 23.9% year to date as of the close of trading on Monday.

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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