Cyclical industries
have a habit of answering the question “How much worse/better can
things get?” in pretty dramatic fashion. With mining companies slashing
capex budgets left and right, winter is definitely coming for leading
mining equipment company Joy Global (NYSE:JOY).
While management's success in streamlining operations, improving
manufacturing yield, and reducing fixed costs should keep the company's
head attached firmly to its body, there's a risk to shareholders that
the market hasn't fully digested what weak orders today will mean for
tomorrow's revenue. So although I believe Joy Global is undervalued on a
long-term basis, investors buying or holding today have to be able to
tolerate the thought that the shares could have further to fall before
stabilizing.
Please follow this link for the full article:
http://www.investopedia.com/stock-analysis/082813/winter-still-coming-joy-global-joy-cat-kmtuy-cfx.aspx
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