Tuesday, November 29, 2011

JOY Global 'to the World'; Joy Global up 7% on the day

On November 29, 2011, Joy Global saw an incredible one day rise of $5.94 per share, to settle at a price of 84.72. This seven and a half percent rise was mostly due to the fact that we are in the midst of extremely volatile times for financial markets. Opening the day with the two positive stories, the legendary sales on Black Friday combined with positive news regarding negotiations concerning the debt crisis in Europe, was able to give way for a two a half percent rise in the Dow Jones Industrial.

The reasons pertaining to Joy’s particularly favorable numbers could be the result of a multitude of factors. Firstly, being one of the more risky companies within its sub-industry, Joy had dropped over 8 percent from November 18-25 on speculation of possible takeovers and moves into China by one of their main competitors, Caterpillar, Joy could have been undervalued coming into the day, and saw over exaggerated gains. The only official news released by the company for the day was its announcement that it would be giving out a dividend of $0.175 for the quarter, which did seem to be encountered as a surprise by the market. So with limited aspects for growth on the day, I do not think we can see this rise in the company’s market share as a significant source of growth, but rather a move with the market that could perhaps do the opposite with any negative news in the upcoming days.

-Matthew Buechele

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