Joy Rises

Joy Global was up to 93.03 an increase of 4.36% on Wednesday January 25 with many analysts being much more positive about their views on the company. After reporting sluggish numbers in december, which saw the stock fall 11% in one day, many analysts seemed very reluctant to support the mining giant. Since this point, there have been positive signs in commodity demand, a main driver for Joy’s growth along with its purchase of International Mining Machinery Holding Ltd, which has given the company a stronghold in the Chinese mining industry. With a focus on mid tier mines that are mostly State owned, Joy believes it can see major growth in throughout China. With much of its revenue coming from outside of the United States, Joy Global is also benefiting heavily from the depletion of coal inventories throughout India, leading way to more mining.


Joy Global expects to see spending rise 10-15% throughout the 2012 year, with their drivers for growth to be in Chinese and Australia, iron ore in South America and Africa, and also copper in South America. This combined with the strong signs of economic recovery in the United States and many projects which have carried over through the New Year, has analysts predicting a big 2012 for Joy Global, with its shareholders to benefit. With the many recent purchases and integrations, Joy Global claims that it may not be done, and could be looking to make more deals and expand to even further consolidate the mining industry.

Matthew Buechele

CB&I Announces Kearl Oil Sand Expansion Project

On Wednesday, January 18th, Chicago Bridge & Iron announced that they had been awarded a contract, valuing $750M, on the Kearl Oil Sands in Alberta Canada.  The award is an expansion on CB&I's initial EPC contract which started in 2008 during the Kearl Initial Development project.  The scope of the award includes engineering, procurement, module assembly and construction of a second bitumen extraction plant, froth tank farms, multiple storage tanks, and six froth settling units.

Chicago Bridge & Iron is following our initial thesis which was largely developed around the ability for the company to capture expansion projects in areas where they already had exposure.  Although this may not be one of the considerable LNG projects, this represents the strength of CB&I and the confidence their consumer place in the company.  In 2012, we are expecting CB&I to continue to capture expansion contracts and continue to grow their revenue.  CB&I has traded +6.5% since the open on January 18th.

-Jeremy Pellizzari

Ecolab Ahead of Price Target

ECL closed out at 60.54 today. This moves it above its current price target of 59.13. Ecolab develops products and services for hospitality, foodservice, healthcare and industrial markets. Last month, Ecolab Inc. announced the acquisition of Esoform, an independent healthcare manufacturer focused on infection prevention and personal care. ECL also announced it will acquire InsetCenter pest elimination business in Brazil. The sales from this company are approximately $6 million. They also completed the purchase of Nalco in a stock-and-cash deal worth $5.6 billion. Nalco Holding Company provides water, energy, air and process technologies and services.

We are currently evaluating our position in this company.
-Jim

JOY Completes Acquisition

Joy Global Inc. announced that it has completed the acquisition or approximately 41.1% of the outstanding common stock of International Mining Machinery Holding LTD.IMM is the leading designer and manufacturer of underground mining equipment in China.  This transaction was announced in July, and will involve the purchase of 534.8 million shares of IMM. In addition to this purchase, Joy Global now owns approximately 69.2& of IMM’s outstanding common stock.

-Jim

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.

-Jim

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

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