Joy Global in 2012: No Joy for Investors

Now that 2012 is nearing its end, it's a good opportunity to look at what happened throughout the year to the stocks you follow. If you know the important things that a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it really deserves a spot in your portfolio.

Today, I'll look at Joy Global (NYSE: JOY  ) . As a major player in the mining equipment industry, Joy Global has enjoyed some impressive gains in recent years as expansion around the world has increased demand for natural resources. More recently, though, the global economy has slowed down, and Joy Global has paid the price. Below, you'll find more on what moved shares of Joy Global this year.

Stats on Joy Global

Year-to-date stock return

(25%)

Market cap

$5.88 billion

1-year revenue growth

31.2%

1-year net income growth

21.3%

Dividend yield

1.2%

CAPS rating

****

Source: S&P Capital IQ.

Why has Joy Global fallen this year?
Joy Global specializes in mining equipment for both underground and surface operations. More than two-thirds of its sales come from mining companies that focus on coal. That goes a long way toward explaining the equipment-maker's woes, as the coal industry has been near rock-bottom for much of the year in light of very low natural gas prices that have spurred electric utilities to switch from coal- to gas-fired plants. Rival Caterpillar (NYSE: CAT  ) has also had to cut forecasts because of slowing growth that is hurting demand.

Yet even with adverse conditions in the industry, Joy Global also faces new competition. General Electric (NYSE: GE  ) has made a foray into mining equipment, having acquired both Fairchild International and Industrea in preparation for a stronger push into the business over the next four years. Moreover, although Terex (NYSE: TEX  ) and Manitowoc (NYSE: MTW  ) have more of a construction-oriented bent to their respective businesses, both act as barriers to Joy Global freely diversifying beyond mining equipment to related areas with more immediate growth potential.

Low prices for coal and other mined commodities are behind Joy Global's terrible performance. But with new signs of life coming from emerging markets, increased demand could finally help those mined products hit bottom, making now a strong time to consider adding Joy Global to your portfolio.

Learn more
To understand what's happening with Joy Global, you really need to dig into how archrival Caterpillar ticks. Caterpillar's quality products, extensive service network, and unparalleled brand strength give it a competitive edge over Joy Global and its other peers. But should you buy Caterpillar instead of Joy Global? Our in-depth research report on Caterpillar can give you the answers you need to make a smart investment choice. Just click here to access it now.

Click here to add Joy Global to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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