For those investors feeling battered by further weakness in commodity stocks, the company with the biggest bruise whispers soothing words of comfort and joy.
I see the earnings in a very different light. New orders for equipment rose to a record $1.5 billion during the fiscal third quarter, driving sales up sharply, while the company's backlog has nearly doubled over the past year to $3 billion. Despite that, the result was woefully insufficient to surmount a tsunami of negative sentiment that continues to flood the commodities space at large and, on Wednesday, Joy Global in particular.
Not only does the company continue to deliver solid earnings growth while expanding production capacity and increasing sales backlogs, but the discussion from management provides some of the most encouraging commentary on the status of global demand for commodities that investors will find anywhere.
Equipment manufacturers like Joy Global, Caterpillar
Echoing a phenomenon I observed for silver back in March, the discussion also noted an unusual disconnect for various commodities between the weaker prices observed on the paper-based exchanges and robust spot prices for physical delivery.
The company sees annual growth in global steel demand at 4% to 5% over the next five years, driven by continued growth in China and India. I hope shareholders of POSCO