abels joyg
TRANSCRIPT
Kevin AbelsNASDAQ: JOYG
Joy Global Inc..
• Company Description• Sources of Revenue• Porter’s 5 Forces• SWOT Analysis• Competitors• Key Drivers• Stats• Valuation• Conclusion
Presentation Outline
•Joy Global manufactures mining equipment used to extract coal, copper, iron ore, and many other minerals and bedded materials. •Joy Global is comprised of three market-leading businesses
• P&H Mining Equipment, •Joy Mining Machinery•Continental Crushing and Conveying.
Company Description
Company Description
• Founded in the late 19th century
• Headquartered in Milwaukee, Wisconsin
• Employs more than 10,000 personnel worldwide
Sources of Revenue
Sources of Revenue
Annual Sales
• Approximately 60% of revenues originate from aftermarket services
• Stability to revenues/profits
• Creates customer preference
Porter’s Five Forces
• Several dominant players• Joy Global• Bucyrus• Terex
• Differentiated by service/support
• All are global players
Degree of Rivalry - Medium
• Capital intensive industry
• Big players dominate market
• Not a fragmented industry
Potential of New Entrants-Low
Suppliers have minimal power over industry players
Commodity nature of supplies limits power
Power of Suppliers-Low
Power of Customers-Medium
• Relatively low, but considerable, switching cost
• Little product/service differentiation
Threat of Substitutes-Low
• Very few substitution products
• Strong market position – Highly exposed to emerging markets (China Mining Machinery)
• Financial stability
• Strong backlogs that extend out for several years
• A majority of revenues come from aftermarket parts and services – Tied to production levels and have been historically stable in economic turmoil
Strengths
• Majority of revenue is derived from the US market where industrialization is declining
• Financial performance is heavily dependant upon commodity prices – specifically coal, copper, and iron ore
Weaknesses
• China
• Other emerging markets
Opportunities
• Possible trend of moving toward natural gas to provide energy solutions
• Eventual economic slowdown in China
• New competitors will arise in the emerging markets
• Alternative energy
Threats
Company PE ttm EPS ttm Net Margin Debt/Asset
Joy Global Inc 10.98 4.32 13% 19.32
Bucyrus 10.04 3.57 11.36% 22.44
Terex - -5.07 -5.89% 32.30
Competitors
*Most Recent Quarter
Key Drivers
Key Drivers
• China/Emerging Markets – Early on a Long Journey
• Currently in restocking phase
• China positioned to lead the global economic recovery
Key DriversCoal Consumption by Country Grouping
• Market Cap: $4.86B
• P/E: 10.98
• ROA: 17.67
• ROE: 62.37
Stats
Valuation
Valuation
• Price – $47.45• Yr Range - $14.33 – $56.07
Valuation Assumptions
Conclusion