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The Money Man Behind Rick Santorum: Who Is Foster S. Friess?Lufkin Industries (NASDAQ: LUFK) serves
the heavy industry arena. Its oil field division manufactures, services and refurbishes oil field pumping units. It also provides computer control equipment for the units and operates an iron foundry to produce castings for new units. The company's power transmission segment provides gearboxes for industrial applications and makes parts for after-market service. The firm operates in North America, Latin America and Europe.
Lufkin pleased investors last week, when it reported Q1 EPS of $1.01 and revenues of $147 million. Analysts had been expecting $1.00 and $132.7 million. Management also guided Q2 EPS to $1.30-$1.40 ($1.20 consensus) and FY08 EPS to $5.10-$5.30 ($5.17 consensus). Backlog totals increased 45.2% from the year-ago quarter and 17.9% from the end of 2007.
LUFK shares
popped on the news and are now forming a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the stock with two "strong buys" and one "buy". Analysts expect a 13% growth rate, through the next year. The LUFK P/E ratio (16.10), Operating Margin (17.72%), Net Profit Margin (12.09%) and Return on Assets (13.54%) compare favorably with industry, sector and S&P 500 averages. Institutions own about 84% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $50.73 and $78.00. A stop-loss of $67.25 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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