Happy with Joy Global's Solid Report

I've been considering adding either Joy Global (JOYG) or Bucyrus (BUCY) - both mining equipment makers, with more emphasis on coal from Joy Global. I've owned both of these in the past for my own account, but have yet to own either in the fund. Frankly, I thought the story might be closer to slowing down as emerging markets slow but from the data coming in, my thesis appears incorrect. Also these names are subject to cost inflation as the inputs needed to make their product ramp, but they seem to be able to pass on those costs to a large degree.

The stocks have been very strong of late so I don't want to chase anything in this market, but if/when they pull back I'll be looking to add 1 or both. Joy Global just reported and what else? coal.. contributed to it's strength.

• Mining equipment maker Joy Global Inc (JOYG) reported a better-than-expected rise in quarterly earnings on Thursday, citing strong international demand and improving conditions in the U.S. coal market.
• The company also raised its forecast for 2008 profit and sales, sending its shares up more than 6 percent in early trading.
• Joy Global said earnings from continuing operations for its fiscal first quarter that ended Feb. 1, rose to $71.1 million, or 64 cents per share, from $59.7 million, or 51 cents per share, a year earlier. Analysts' average earnings forecast was 62 cents per share, according to Reuters Estimates.
• Sales rose to $640.3 million from $560.5 million. Analysts had expected $638.7 million.
• Robert McCarthy, an analyst at Robert W. Baird & Co, said "exceptional order activity" during the quarter had added to Joy's "already strong longer-term outlook."
• The Milwaukee, Wisconsin-based company said it expects earnings for the full fiscal year of $3.15 to $3.45 per share, up from a previous estimate range of $3.10 to 3.25 a share. The average Wall Street forecast is $3.34.
• The mining industry's production capacity has fallen behind growth in commodity demand, and investment over an extended period will be needed to boost capacity, Joy Global Chief Executive Mike Sutherlin said in a statement
• Lagging production capacity "has resulted in supply shortages and dramatic increases in commodity prices," he said. "These price increases underlie the expectation that it will take several years and significant investment for capacity to catch up to demand."

Disclosure: No positions

Comments

[swimjames]

what about Alloy Steel International?

[TN hick]

how you frame the question often biases the answer...

your presentation concentrated on JOYG - have you already made your selection?

for me, I take a position in both [equal $ weight]

as for AYSI - higher risk, different industry