Wednesday, December 14, 2011

JOY Global Shares Hit hard by Mining Equipment Outlook

Joy Global shares were down 10.75% at 2PM. Joy global warns that their production growth could be moderate because of weaker demand for commodities. Joy Global predicts growth to be at a “more tempered pace”. They reported revenue that was slightly short of analyst expectations. Spot prices for coal, copper and iron ore are down from highs set earlier this year by as much as 20 percent, the company noted in the announcement of its earnings. JOY will now shift their focus on long term growth.

Market Vectors-Coal ETF (-.69, -2.06%) has seen a 12% decline in the last month. Market Vectors-Coal ETF (the Fund) seeks to replicate as closely as possible the price and yield return performance of the Stowe Coal Index (COAL or the Index) by investing in a portfolio of securities that generally replicates COAL. There is some fear that the ETF could fall just below its October low of $27.50. Joy Global currently makes up 11% of KOL’s weight.


JOY Reports Sad Earning's

Joy Global released their annual report today, December 14, 2011. Despite positive words from CEO Mike Sutherlin, saying "Our fourth quarter was a good finish to an exceptional year,” the market interpreted the results in a much different manor. Missing their quarterly EPS $.06, a 3.3% miss, the stock opened down 4.84% and his since fallen further to an 11.85% loss for the day. The miss on EPS combined with a 2012 annual EPS target set by the company of anywhere between $7.00 and $7.40, a high range, especially considering the market is expecting 7.19, allowing for room for failure.

In the report itself, Joy Global stressed its increase in future bookings and a more forward approach discussing the future growth more than the current year’s success, or lack thereof. With the purchase of LeTourneau Mining, combined with the future bookings, does not rule out the possibility of a large comeback year, especially if Joy Global can hit the upper end of its projected EPS. The downsides continue with growth for mining in India and China not appearing as vibrant as once thought, with FactSet stating that the region will "grow at a more moderate rate in 2012." AS banks start to react to this news, favorability towards the stock is declining with JPMorgan lowering its price target for the company from $97 to $85, a 14% decrease. With so much growth of the company dependant on world macroeconomic success, JPMorgan felt that the company would continue its sluggish growth until we began to see more of an economic upturn.

- Matt Buechele

Monday, December 12, 2011

ECL Active in Acquisition Market

On Thursday, December 8, 2011 Ecolab Inc. announced the acquisition of the Brazilian pest control company InsetCenter, which has about $6 million in annual sales. Ecolab plans to merge InsetCenter into its existing pest elimination business in Brazil. The terms of the deal were not disclosed but Douglas M. Baker, Jr., Ecolab's Chairman and CEO commented on the announcement, saying, "This acquisition will substantially increase our Brazilian Pest Elimination service capacity and scale to our business, making us the leader in commercial pest elimination in Brazil”. Ecolab was up $0.03 (0.05%) at the close today after a late general market sell off.

It has been a very busy month for Ecolab with its acquisitions of Nalco, the world's leading water treatment and process improvement company and the Italian health care products maker Esoform and as of today, InsetCenter. I believe that the recent acquisitions coupled with its strong performance in recent months are a good indication of growth on a global scale.

-Drew Sweeney, Junior Analyst