Joy Global Moving Higher on Takeover Chatter (NYSE: JOY), (NYSE: CAT)

Joy Global Inc. (NYSE: JOY) moved higher from the open on heavy volume on talks of takeover chatter. Joy Global Inc. is a manufacturer and servicer of mining equipment for the extraction of coal and other minerals, and ores. In a recent report from A & E Holdings, it was said that Joy Global would be an excellent takeover candidate for Caterpillar Inc. (NYSE: CAT). Caterpillar is a serial acquirer and has been acquiring companies regularly. Recently Caterpillar acquired Bucyrus in 2011. Bucyrus’s mining products, cranes, aerospace systems, and petroleum industry products will now be added to Caterpillar’s portfolio, which increases the selection and consumer offering. The firm also acquired Pyroban Group Ltd, a maker of explosion protection products. Caterpillar uses this new technology within its products to appeal to more consumers and offer differentiated services.

Caterpillar Inc. is in excellent financial shape. Its interest coverage ratio is healthy at 3.88. The company also has very healthy free cash flows which would make it a good takeover candidate. However, its debt to equity ratio is 113% which would likely discourage anyone from taking it over. If there were no debt, it would be a prime candidate for a leveraged buyout opportunity with its stable net income and cash flow. However, with a market cap over $50B and debt to equity of over 100%, it is not likely to attract any buyers.

Joy Global, Inc. (NYSE: JOY): traded higher by 0.78% or $0.59/share to $76.64. In the past year, the shares have traded as low as $57.48 and as high as $103.44. On average, 2120630 shares of JOY exchange hands on a given day and today's volume is recorded at 11592.

Caterpillar Inc. (NYSE: CAT): traded higher by 0.30% or $0.28/share to $94.26. In the past year, the shares have traded as low as $67.54 and as high as $116.55. On average, 8980360 shares of CAT exchange hands on a given day and today's volume is recorded at 78274.