Mining investment is a great driver, in my opinion. For mining companies, after the rise in the price of the main commodities, operational margins are at extreme levels and incentives to invest are huge. BUCY and JOYG are "the oil services sector" of mining. They are the few companies that are 100% exposed to mining (for instance, mining represents only c15% of revenues for CAT). BUCY just made an amazing purchase in Europe, which will help the company to expand into underground coal and reach new clients in Asia. The market might be scared of a substantial drop in the price of copper and the likes, or in the need for a rights offer to pay for the acquisition, but the new price targets around USD 65 presented by some investment banks appear realistic to me.
$23.17 (01/28/07)
