Milwaukee-based Joy Global Inc. (NASDAQ: JOYG) offered up its fourth-quarter earnings report today, with the company raking in a profit of $1.11 per share on $1 billion in sales. The results surpassed analysts' expectations, which called for earnings of $1.08 per share.

The mining-equipment concern also updated its fiscal 2009 guidance. Joy Global now expects revenues of $3.5 billion to $3.7 billion for the current fiscal year, with earnings per share arriving between $3.60 and $4.00. The forecast fell short of Wall Street's consensus estimates for a full-year profit of $4.24 per share on $4 billion in revenue.

With so many corporations falling short of quarterly earnings expectations, investors have been quick to reward JOYG's better-than-expected fourth quarter. The stock gained roughly 10% in the first hour of today's trading, propelling the shares above resistance from their descending 10-week moving average.

Once the euphoria fades, though, Joy Global could be vulnerable to negative analyst notes. Zacks reports six Strong Buy ratings and two Buys, compared to just three skeptical Holds. If any of these bullish brokers are disappointed by the company's modest outlook for 2009, the stock could be hit with downgrades.

Price-target cuts are also a potential threat. JOYG's average 12-month price target is $49.45, according to Thomson Financial, representing a lofty premium of 118% to Tuesday's closing price. Any downward revisions to this consensus estimate could draw fresh selling pressure to the security.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

TheStreet.com's Jim Cramer says the sellers are in control, and without dividend protection, we have no floor.

The bad stuff is in the market. It just has to get more in. That's all. That's the conclusion you have to reach when you see companies like Terex (NYSE: TEX) (Cramer's Take), which is valued at only a billion and a half dollars, or Joy Global (NASDAQ: JOYG) (Cramer's Take) at $2 billion and change or McDermott (NYSE: MDR) (Cramer's Take) at $3 billion.

In other words, forget about the stock prices. They are almost all absurd unless we are headed into a recession of such magnitude that companies start showing severe losses in the first quarter. Think about the market cap size. If Terex, which is actually a pretty good machinery company, can sell at a billion and a half dollars -- about the price that some acquisitive company might have paid for a division of Terex a year ago -- why can't it sell at $1 billion? How about $800 million? What's to stop it? The sellers at this point obviously don't even care about it, not one bit. They just want money. The buyers have had their heads twisted off and don't want anything more to do with it. No one wants to recommend it because the estimates are too high. And without a dividend, it has no protection; besides, people might perceive that the dividend can't be paid -- a la Freeport (NYSE: FCX) (Cramer's Take) -- and sell it anyway.

How will we know when things have thawed? Everyone's looking at LIBOR and I can't blame them as that indicator of lending from one bank to another bank is crucial for the way the system is supposed to work. It's a good thermometer for certain, but I don't want it to overstay its welcome, because there are other "true" indicators out there besides just LIBOR.

I am looking at something else: takeovers. On Monday, we saw Waste Management (NYSE:WMI) pull its bid for Republic Services (NYSE:RSG) , a smart idea as WMI had dropped so precipitously despite reporting better-than-expected earnings that one had to question if it was worth doing it. More important, though, getting the money was proving to be possible, but difficult. This situation also prevailed in Altria's (NYSE: MO) buy of UST (NYSE: UST) where Goldman Sachs said, "Don't bother, wait," even though the integration of the two is crucial for Altria's growth.

Now I expect deals to be done if the banks are for real about lending.

Further, the endless margin selling has created tremendous bargains for well-capitalized companies to buy other companies that have brimming order books but are being kept down because of hedge fund redemptions. How can some company not want to buy a Trinity (NYSE:TRN), for example, which has been virtually cut in half even though both presidential candidates are pro-wind? Or how about a Foster Wheeler (NASDAQ: FWLT) or a Joy Global (NASDAQ:JOYG) or a Terex (NYSE: TEX) betting that if there is credit there will eventually be a revival?

Joy Global (NASDAQ: JOYG) shares are trading higher after the company reported second-quarter profit of $72.1 million, or 66 cents per share. Excluding one-time items, the company earned 86 cents per share, beating analysts' estimates of 72 cents per share. JOYG also upped its fiscal 2008 earnings forecast to a range of $3.15 to $3.30, up from a previous forecast of $2.96 to $3.22. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on JOYG.

After hitting a one-year low of $42.10 in September, the stock hit a one-year high of $82.48 earlier this month. JOYG opened this morning at $82.17. So far today the stock has hit a low of $77.88 and a high of $82.75. As of 12:10, JOYG is trading at $80.47, up 2.59 (3.3%). The chart for JOYG looks bullish and steady.

For a bullish hedged play on this stock, I would consider a June bull-put credit spread below the $70 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in just three weeks as long as JOYG is above $70 at June expiration. JOYG would have to fall by more than 12% before we would start to lose money. Learn more about this type of trade here.

JOYG hasn't been below $70 since early April and has shown support around $76 recently. This trade could be risky if the prices for commodities fall off in the coming weeks, but even if that happens, that position could be protected by support the stock might find from its 50-day moving average, which is currently around $73.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in JOYG.

MOST NOTEWORTHY: Yahoo and Microsoft were today's noteworthy initiations:

• Yahoo (NASDAQ: YHOO) coverage was resumed with a Neutral, target $26 at Goldman Sachs.
• Microsoft (NASDAQ: MSFT) coverage was resumed with a Buy, target $38 at Goldman Sachs.

OTHER INITIATIONS:

• Petrobras (NYSE: PBR) was initiated with an Overweight at J.P. Morgan.
• Joy Global (NASDAQ: JOYG) coverage was resumed with an Overweight, target $88 at Lehman Brothers.
• Bucyrus (NASDAQ: BUCY) coverage was assumed with an Overweight, target $140 at Lehman Brothers.

"One of my favorite was to play the market is to find a hot area and then invest in companies that provide products to support that market," says Dave Dyer.

In The Dave Dyer Newsletter he explains, "Bucyrus International (NASDAQ: BUCY) is a domestic heavy equipment manufacturer that is focused exactly in the areas that will benefit from the global commodities boom.

"The company's products are focused on mining for coal, iron ore, copper, oil sands, and other minerals needed to support the global infrastructure expansion. Mining is hot right now, and all mines need mining equipment. "Rapid industrial expansion in Asia and Eastern Europe requires raw materials. This trend is not likely to stop soon.

"BUCY is a very old company. In 1880, they started as a small foundry in Bucyrus, Ohio. By 1904, they were supplying excavation equipment for one of the largest projects in the world, the Panama Canal. By 1969, they were making earth moving equipment that was almost 22 stories tall. If you need to dig a really big hole, talk to BUCY.

The world's growing energy and infrastructure needs are focusing attention on our ability to effectively mine coal, minerals and ores. A leading maker of the equipment used to efficiently coax such materials from the ground is headquartered in Milwaukee, Wisconsin.

Joy Global (NASDAQ: JOYG) manufactures heavy equipment for the mining industry. Its Joy Mining Machinery segment makes underground equipment for the extraction of coal and other bedded minerals. Products include continuous miners, longwall shearers, powered roof supports, armored face conveyors and shuttle cars. The P&H Mining Equipment unit produces electric mining shovels, rotary blasthole drills and walking draglines for the open-pit mining of coal, ores and precious metals. The company operates facilities and equipment service centers in over twenty countries worldwide. Caterpillar (NYSE: CAT) is a major competitor.

The firm had good news for investors last month, when it reported Q4 EPS of 80 cents and revenues of $736 billion. Analysts had been expecting 75 cents and $717.2 million. The company set a new quarterly order record, which was said to reflect the initial stage of recovery of the U.S. underground coal market. Management also offered in-line guidance for FY08 results. UBS and Stifel Nicolaus subsequently reiterated "buy" ratings on the issue.

MOST NOTEWORTHY: Google Inc (GOOG), Office Depot Inc (ODP), Brinker International (EAT) and Kellogg Company (K) were some of today's more notable upgrades:

• UBS upgraded Google Inc (NASDAQ: GOOG) to Buy from Neutral with a $560 target on valuation.

• Deutsche Bank upgraded shares of Office Depot (NYSE: ODP) to Buy from Hold on valuation, following the recent sell-off.

• Brinker International Inc (NYSE: EAT) was upgraded to Neutral from Sell at Goldman Sachs, based on the company's ongoing restructuring efforts.

• Kellogg Company (NYSE: K) was also upgraded at Goldman Sachs, to Buy from Neutral, and was added to its America's Buy List.

OTHER UPGRADES:

• Lehman upgraded Joy Global Inc (NASDAQ: JOYG) to Overweight from Equal-Weight as they believe the recent sell-off has created a buying opportunity.

• Bank of America upgraded Clear Channel Communications Inc (NYSE: CCU) to Buy from Neutral with a $42 target to reflect their belief that activist shareholders will push for value creation rather than a sale to private equity.

• Wachovia upgraded McCormick & Schmick's Seafood Restaurant (NASDAQ: MSSR) to Outperform from Market Perform.

• BB&T upgraded Universal Truckload Services Inc (NASDAQ: UACL) to Buy from Hold on valuation.

• Lehman upgraded Deere & Company (NYSE: DE) to Overweight from Equal-Weight, with a $135 target. Lehman has increased confidence around the durability of higher agricultural commodity prices as well as the company's ability to turn elevated end market demand into stronger margins, earnings, and free cash flow.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Joy Global (NASDAQ:JOYG) manufactures heavy equipment for the mining industry, operating manufacturing and service facilities worldwide. The firm had good news for investors last week, when it reported Q4 EPS of 79 cents and revenues of $689.3 million. Analysts had been expecting 66 cents and $655.6 million. Management also offered in-line guidance for FY07 results.

The CEO attributed success to a record level of incoming orders. CL King subsequently reiterated its "strong buy" rating on the issue and boosted its price target to $60. The stock popped through 200-day moving average resistance on the news and is now beginning to consolidate the gain in a bullish "flag" pattern. Equities frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers recommend the shares with four "strong buys", two "buys" and two "holds." The JOYG P/E ratio (14.21), Price to Cash Flow ratio (12.46), Sales Growth rate (21.31%), EPS Growth rate (58.00%), Net Profit Margin (17.27%), Return on Assets (23.03%), Return on Investment (34.53%) and Return on Equity (52.27%) compare favorably with industry, sector and S&P 500 averages.

The stock is one of those used to calculate the S&P 400 MidCap Index. Institutional investors hold about 90 percent of the outstanding shares. Over the past fifty-two weeks, JOYG has traded between $31.32 and $72.23. Should you decide to invest, consider a stop-loss of $43.00.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.