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Non-Tech : Lufkin Industries (Nasdaq: LUFK) -- Ignore unavailable to you. Want to Upgrade?

To: Dave Hanson who wrote (86)	7/13/1998 3:56:00 PM
From: Todd D. Wiener	Read Replies (1) \| Respond to of 103

Anyone still out there? LUFK should report Q2 earnings this week. Although the market hasn't been killing LUFK like it has the other oil-related stocks, it also hasn't been giving LUFK much credit for its strong trailer business. Of course, that could be one reason that LUFK isn't making new lows. I see support at $30 and resistance at $37. In the very short-term, LUFK seems to have broken a downtrend. But this could be completely irrelevant, based on the forward looking statements made in the Q2 report. I think that LUFK can make the street numbers. One of the reasons that I like LUFK as an oil-service related stock is that it has a strong trailer business, as well as a gear and foundry business, which can help to offset the dependence on oil pump sales. The gross margins on the trailers are very low, compared to the pumping units, but the sales are much higher. Hopefully, the strong trucking market provided LUFK with enough sales to offset the lousy oil pumping unit market. Once the oil market improves (I think it will happen in the next 6 months or so), LUFK could experience much higher earnings, assuming the trailer division remains strong. I believe this to be true because LUFK enjoys strong pricing on its pumping units, and when the price of oil stays above $16 or $17, LUFK's business is generally very strong. The effect of incremental revenues of pumping units should be quite powerful on the bottom line, due to the much higher margins. I suppose we'll wait and see. I do believe that the time is near when the oil service/drilling stocks may be ripe for the picking. Among others, I like PTEN, KEG, FLC and CDG. Todd