The pickings get mighty slim on the earnings front next week, especially considering that Monday is a holiday. Just one S&P 500 company is on the docket, SAIC, Inc. (NYSE: SAIC), and it’s not floating our boat. But there are a few non-S&P stocks that hold some interest.
One is Joy Global Inc. (NASDAQ: JOYG), the mining equipment manufacturer based in Milwaukee. JOYG operates in the same space as Caterpillar Inc. (NYSE: CAT) and Bucyrus International, Inc. (NASDAQ: BUCY).
JOYG is scheduled to report Q2 results before the open on Thursday, June 4. The Street expects a 35% decline in profits from a year ago. That pales in comparison to the average 23% earnings gain shown over the past four quarters. What’s more, JOYG has beaten the past seven quarterly estimates by an average of 17%. With expectations seemingly low for this quarter, look for that winning streak to continue.
On the charts, the stock has put in a double-bottom at the $45 level, which also provided support in February. Now the shares are dueling with several moving averages, including the 200-day and 20-day. That’s something to keep an eye on as earnings approach next week.
Sentiment toward JOYG shows plenty of skepticism. The put/call ratio is near an annual high and is showing signs of forming a peak. Similar peaks have corresponded to stock strength.
Analysts are lukewarm on the stock’s prospects, with 10 of 17 rating JOYG a “buy.” The bottom line is that there’s plenty of pessimism to unwind into buying, especially if the company continues its pattern of topping earnings estimates.
Another plus is post-earnings price action. Over the past four quarters, the stock has gained an average of 12% within a week following each report. If the stock can wind its way through some moving averages, there’s plenty of room to run up to the high near $65 reached in April.
A JOYG June 50 Call should give the stock plenty of time to extend higher.
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