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Company: Bucyrus International (BUCY)
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  Bucyrus operates in highly cyclical environment.

Purchasing of mining equipment is highly cyclical and dependent upon commodity prices and economic activity. In slow years, order for new equipments can drop substantially. This risk of a severe earnings drop should be priced into the stock.

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  Bucyrus increased its debt level to purchase DBT.

The acquisition of DBT nearly doubled the size of Bucyrus and added leverage to its balance sheet. If the acquisition does not result in perceived benefits, then the mining manufacturer may suffer a drop in earnings.

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  Bucyrus is not diversified in the commodity business.

Bucyrus generates 73% of revenue from coal mining companies. Should production levels decrease, Bucyrus sales would be negatively impacted.

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