JOYG, HEES, CAT, TEX, ASTE, BUCY, Machinery-Construction and Mining Stocks Overvalued
May 5, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Machinery-Construction and Mining sector and these stocks are the most undervalued as of today. JOY GLOBAL INC (NASDAQ:JOYG), H&E EQUIPMENT SERVICES INC (NASDAQ:HEES), CATERPILLAR INC (NYSE:CAT), TEREX CORP (NYSE:TEX), ASTEC INDUSTRIES INC (NASDAQ:ASTE), BUCYRUS INTERNATIONAL INC (NASDAQ:BUCY) are all expected to go Down as they are Overvalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.
The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:
Symbol Company Name Last Close Fair Value Valuation Industry
JOYG JOY GLOBAL INC $94.69 $90.45 4.70% Overvalued Machinery-Construction and Mining
HEES H&E EQUIPMENT SERVICES INC $17.88 $14.73 21.40% Overvalued Machinery-Construction and Mining
CAT CATERPILLAR INC $110.77 $90.06 23.00% Overvalued Machinery-Construction and Mining
TEX TEREX CORP $31.94 $30.99 3.10% Overvalued Machinery-Construction and Mining
ASTE ASTEC INDUSTRIES INC $36.80 $32.01 15.00% Overvalued Machinery-Construction and Mining
BUCY BUCYRUS INTERNATIONAL INC $91.46 $83.81 9.10% Overvalued Machinery-Construction and Mining
Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.
Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.
JOY GLOBAL INC (NASDAQ:JOYG) - Joy Global Inc. engages in the manufacture and servicing of mining equipment for the extraction of coal, copper, iron ore, oil sands, and other minerals worldwide. The company operates in three segments: Underground Mining Machinery, Surface Mining Equipment, and Continental Crushing and Conveying. The Underground Mining Machinery segment produces continuous miners, longwall shearers, powered roof supports, armored face conveyors, shuttle cars, flexible conveyor trains, roof bolters, battery haulers, and continuous haulage systems. It also rebuilds and services equipment, and sells replacement parts and consumables in support of installed base. The Surface Mining Equipment segment produces electric mining shovels, walking draglines, and rotary blasthole drills. This segment also provides used electric mining shovels, logistics, and life cycle management support services. The Continental Crushing and Conveying segment manufactures and distributes bulk material crushing and conveyor systems used in coal and hard rock mining for metals and minerals, aggregates, and tunneling. Its products include feeder breakers, conveyor systems, and high angle conveyors. Joy Global Inc. sells its products primarily to global and regional mining companies. The company was founded in 1884 and is headquartered in Milwaukee, Wisconsin.
H&E EQUIPMENT SERVICES INC (NASDAQ:HEES) - H&E Equipment Services, Inc., an integrated equipment services company, provides heavy construction and industrial equipment in the United States. It rents, sells, and provides parts and service support for hi-lift or aerial platform equipment, cranes, earthmoving equipment, and industrial lift trucks. The company also sells new and used equipment and parts, as well as provides maintenance and repair services for the customers owned equipment. In addition, H&E Equipment Services offers ancillary equipment support activities, including transportation, hauling, parts shipping, and loss damage waivers. The company provides its services to industrial and commercial companies, construction contractors, manufacturers, public utilities, municipalities, and maintenance contractors, as well as for other industrial accounts. As of March 1, 2010, the company served approximately 29,500 customers through 66 full-service facilities across 24 states in the West Coast, Intermountain, Southwest, Gulf Coast, Southeast, and Mid-Atlantic regions of the United States. H&E Equipment Services was founded in 1961 and is headquartered in Baton Rouge, Louisiana.
CATERPILLAR INC (NYSE:CAT) - Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petroleum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.
TEREX CORP (NYSE:TEX) - Terex Corporation manufactures machinery products, equipments, and related replacement parts and components for the construction, infrastructure, quarrying, shipping, transportation, power, and energy industries. The companys Aerial Work Platforms segment provides aerial work platform equipment, telehandlers, light towers, and utility equipment. Its products include material lifts, portable aerial work platforms, trailer-mounted articulating booms, self-propelled articulating and telescopic booms, scissor lifts, telehandlers, truck-mounted digger derricks, and aerial devices and cable placers Its Construction segment offers compact construction equipment, such as loader backhoes, compaction equipment, mini and midi excavators, site dumpers, compact track loaders, skid steer loaders, and wheel loaders; and landfill compactors and bridge inspection equipment, and roadbuilding equipment comprising asphalt and concrete equipment, including pavers, transfer devices, plants, mixers, reclaimers/stabilizers, placers, and cold planers. The companys Cranes segment provides mobile telescopic cranes, tower cranes, lattice boom crawler cranes, truck-mounted cranes, and specialized port and rail equipment, including straddle carriers, gantry cranes, mobile harbor cranes, ship-to-shore cranes, telescopic container stackers, lift trucks, and forklifts. Its Materials Processing segment offers crushers, washing systems, screens, apron feeders, and related components and replacement parts. The company also provides financial products and services to assist in the rental, leasing, and acquisition of Terex equipment. Terex Corporation sells its products through dealers and distributors; and leases and rents equipment to third parties. The company, formerly known as Terex U.S.A., Inc., was founded in 1925 and is based in Westport, Connecticut.
ASTEC INDUSTRIES INC (NASDAQ:ASTE) - Astec Industries, Inc. engages in the design, engineering, manufacture, and marketing of equipment and components used in road building, utility, and related construction activities worldwide. The companys Asphalt Group segment offers asphalt plants and related components, heating and heat transfer processing equipment, and storage tanks for the asphalt paving and other non-related industries. Its Aggregate and Mining Group segment provides jaw, cone, and impact crushers, as well as vibrating feeders, inclined, and horizontal screens; aggregate processing equipment for the sand and gravel, mining, quarrying, concrete, and asphalt recycling markets; mobile screening plants, portable and stationary screen structures, and vibrating screens designed for the recycle, crushed stone, sand and gravel, industrial, and general construction industries; portable and stationary aggregate, and ore processing equipment; hydraulic rock breaker systems, and a line of four-wheel drive articulated utility vehicles for underground mines and quarries; and hydraulic breakers, compactors, and demolition attachments for the North American construction and demolition markets. The companys Mobile Asphalt Paving Group segment offers asphalt pavers, material transfer vehicles, milling machines, and asphalt reclaiming and soil stabilizing machinery; asphalt paver screeds that attach to the asphalt paver to control the width and depth of the asphalt as it is applied to the roadbed; windrow pickup machines, which transfer hot mix asphalt from the road bed into the paver's hopper. Its Underground Group segment provides heavy-duty trenchers, and utility trenchers, vibratory plows, and compact horizontal directional drills; maxi drills and auger boring machines, and down-hole tooling; and large vertical drills for the oil and gas industry. The company offers its products through sales agents, distributors, and dealers. Astec Industries was founded in 1972 and is based in Chattanooga, Tennessee.
BUCYRUS INTERNATIONAL INC (NASDAQ:BUCY) - Bucyrus International Inc. designs, manufactures, and markets draglines, electric mining shovels, and rotary blast-hole drills employed in surface mining, as well as providing aftermarket replacement parts and services for its machines. The companys equipment is used for mining copper, thermal coal, metallurgical coal, oil sands, iron ore, molybdenum, phosphate, bauxite, gold, diamonds, and uranium. It also offers engineered replacement parts, maintenance and repair labor, technical advice, refurbishment and relocation of machines, structural and mechanical engineering, nondestructive testing, and repairs and rebuilds of machine components, among other things. The company, based in South Milwaukee, was founded as the Bucyrus Foundry & Manufacturing Co. in 1880.
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