Out Fox The $treet

As the largest shareholder of Bucyrus (BUCY), Terex (TEX) is a big beneficiary of the buyout of BUCY by Caterpillar (CAT).  TEX owns 5.8M shares now worth over $500M. Not only do they get the appreciation from the 30% gain today, but more importantly TEX gets to cash out their shares that they acquired via the sale of their mining division to BUCY at a premium. Having the $500M in cash on hand is a lot more valuable to them then stock in BUCY. TEX provides one of the best stock picks for the global rebound. At $25, TEX provides one of the few remaining stocks that hasn't rebounded. The stock still remains roughly 75% below 2008 highs while some stocks have already eclipsed those highs ala BUCY. The crane industry is still struggling to recover from the financial crisis, but signs are emerging that 2011 will the recovery year and TEX likely plays catchup with the market. TEX now enters the recovery phase of its business cycle with a rock solid balance sheet. After the close of t...

Incredible news from Vale (VALE) the leading iron ore producer in the world located in Brazil. VALE plans to double capital  spending int 2011 to $24B in order to diversify away from iron ore and into pricier metals and fertilizers. This is nearly a doubling from the $12.9B planned for 2010. Who will benefit from the increased spending? Naturally companies like Joy Global (JOYG), Bucyrus (BUCY), and Caterpillar (CAT) could see improved orders. Terex (TEX) could see some orders for its new port crane business as well. What's interesting is that a large portion of the increase will go towards logistics building of expanding rail capacity and ports. Maybe that explains why CAT recently expanded its rail engine exposure. One of the major focuses of the spending will be on fertilizers. Goals include doubling phosphate rock output and quadrupling potash production by 2015. Coal production will also nearly quadruple with just about every area nearly doubling. As far as VALE, its n...

Terex is one of the largest builders of Construction and Mining equipment in the world. Late Sunday night they announced a deal to sell their mining equipment business to Bucyrus (BUCY). According to management, this deal for $1.3B in cash (or potentially $300M in BUCY stock) allows for TEX to focus on the Crane, Aerial Work Platform, Construction, and Materials Processing sectors. It also provides TEX with much needed liquidity in this liquidity strained market. The deal transfers about 20% in sales or roughly $1B from 2009 totals, but only 15% of sales back in the boom times of 2008. The mining segment was also requiring over 20% of working capital expenditures even though in normal times it doesn't produce more then 15% of revenues. On the Conference Call this morning to discuss the deal, the CEO announced that TEX has a goal to double revenues to roughly the $8B level and EPS to $6 by 2013. Impressive numbers for a $20 stock with a $2.2B market cap if they can achieve those n...