By Spencer Jakab 

A race to the bottom is dangerous--especially near big holes in the ground.

Few are watching the slumping mining industry more nervously than Joy Global Inc., the sector's leading supplier of heavy equipment. Benchmark iron-ore prices are down by nearly half this year, while seaborne thermal coal is down by one-quarter to a five-year low. Even so, large miners such as BHP Billiton Ltd. and Rio Tinto PLC are waiting for weaker companies to curtail production before making drastic cuts themselves.

Investors are betting Joy won't live up to its name when it releases results Wednesday for the fiscal year through Oct. 31. The stock has lost 25% of its value since management updated earnings guidance on Sept. 4, even as analyst estimates have drifted to the lower end of the company's forecast range of $3.15 to $3.30 in adjusted earnings per share. Reported earnings are seen at $3.01 a share, down sharply from $4.99 in fiscal 2013.

A disappointment could dent the stock again given general market unease; Joy's shares fell after three of its past five earnings reports. Despite a bleak outlook for miners in 2015, though, that may represent a buying opportunity.

At first glance, Joy seems less worthy of a gamble than, say, oil-field-services companies, who are having an awful year of their own. An index of those companies is off by about 40% from its 52-week high compared with a little less than 30% for Joy.

Consider, though, that many key commodity prices began falling well before crude did. Thermal coal, for example, has been slumping in the U.S. market since 2008. The market for seaborne metallurgical coal also weakened well before oil, which was above $100 a barrel five months ago

And while Joy's fiscal third-quarter results released in September had already looked bleak, they showed signs of stabilization. Net sales were off by one-third, year over year, but the company's backlog had risen. On a rolling 12-month basis, bookings had stabilized for the first time in 2 1/2 years. Even if those turnaround signs strike some as premature, based on recent macroeconomic news, that appears amply reflected in the share price.

The time to buy is before the light appears at the end of this mine shaft.

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