Wall Street fairy tales usually don't end well. When a kiss finally breaks the spell around a company, it's seldom a fair prince doing the kissing. Usually, it's a troll that goes by the name of "reality's wake-up call."
Leading mining-equipment maker Joy Global
It's hard for me to get a really firm grasp on this quarter. Revenue growth of 19% is normally nothing to cry about, unless you've accustomed investors to 30%+ growth. And while the margin improvements in the business were laudable, management strongly suggested they weren't sustainable. Likewise, while I certainly understand that orders don't always come in the nice linear fashion that Wall Street graphs suggest, a one-third drop in new equipment orders is still a little unnerving.
By no means am I cheering for more pain for Joy Global shareholders, but should this rout go on, I might start to get a little curious about it as a short-term play. See, even if Peabody
And let's not forget China. I know, I know -- China is every company's "get out of jail free" card, but just hear me out. The Chinese know they need resources, and they also know they have a lot of resources . in the ground. Accordingly, I still expect Chinese companies to continue investing in mining operations -- and ordering new gear from the likes of Joy Global to get the job done.
It's never fun to be in a stock when it transitions from "valuations don't matter" to "oh, yes, they do." The events of the past couple weeks might have permanently soured many folks on cyclicals and commodities in general. But Joy Global is still a well-run company serving markets with unfulfilled demand. That doesn't guarantee anything for the stock, but at least it's something to hold on to on an otherwise ugly day.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).