NEW YORK (TheStreet) -- "If at first you don't succeed, try, try again" is one of my favorite childhood proverbs. As an investor, however, that advice can be a recipe for financial ruin. And for those who have placed their faith in Joy Global (JOY), a manufacturer and servicer of coal-mining equipment, it appears that it's past time to stop trying.
To call Joy Global stock a disappointment would be an understatement. Not only is it down more than 16% in 2015, but expand the horizon to five years, and it's been a bloodbath. But there remain investors who follow the proverb above, so new money comes in with each new low made by JOY stock. After each decline, the price looks cheaper, luring investors with the idea that a bottom has been found. Instead, things keep getting worse.
Although Joy Global, headquartered in Milwaukee, is profitable, the company -- like peers Cliffs Natural Resources (CLV) and Console Energy (CNX) -- operates in a coal industry that is suffering from poor economics. That is to say, there is too much supply and too little demand to make coal-related stocks worthwhile investments.
So ahead of Joy Global's second-quarter earnings results -- due out Thursday before the opening bell-- do not touch these shares. Granted, at 12 times earnings, there's some implied value here, especially when compared to the average S&P 500 (SPX)stock's P/E of 21. But in this case, "cheap" is cheap for a reason.
During the last five years, Joy has been cheap and it still hasn't kept the so-called "smart money" from buying these shares. Take a look at the chart.