Lufkin Industries (Nasdaq: LUFK) Message Board

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Non-Tech : Lufkin Industries (Nasdaq: LUFK)

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To: Todd D. Wiener who wrote ()	2/17/1998 3:06:00 PM
From: Todd D. Wiener	Read Replies (1) of 103

Lufkin Industries is the leader in the market for oilfield pumping units, or pumpjacks. It is also a producer of high-quality highway trailers. Its businesses have been experiencing greater operating efficiencies over the past several quarters, and the company should achieve consistently higher margins over the next several years. Lufkin is currently experiencing 10-year highs in returns on equity and assets, operating margins, revenues and earnings. The stock has fallen from its high of $40, due to the decline in oil prices and its effect on the oilfield service/equipment stocks. However, LUFK is perhaps the most undervalued stock in its industry, trading at less than 12 times 1998E EPS of $2.70. Its long-term growth rate should be at least 20% annually, and it could be much higher than 30%. The company announces Q4 and year-end results today after the market close, and I believe that they will beat estimates for $0.74. The outlook for the company is extremely favorable for the next few years, as the drop in oil prices is a transitory phenomenon. I recommend BUYING LUFK, with a 2 year price target of $70. Todd

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