Lufkin Industries Inc.

Lufkin Industries Inc. (LUFK) is trading near its 52-week high, helped by higher energy prices and an optimistic outlook from management.

Company Description

Lufkin Industries Inc., and its subsidiaries manufacture and sell oil field pumping and power transmission products worldwide. The company was founded in 1902 and has a market cap of $938 million.

Shares of LUFK continue to trend higher, driven by elevated energy prices and the company's better than expected third-quarter results, reported in mid October.

Third-Quarter Results

Revenue plunged by 40% from last year to $117.7 million in a challenging economic environment, but earnings came in ahead of expectations at 34 cents per share, doubling the Zacks Consensus Estimate of 17 cents.

Although the drop in revenue was disappointing, the company noted that the stabilization of crude between $65 and $75 and ongoing growth in land-based drilling provide reason for 'cautious optimism.'

Estimates Advance

Analysts have boosted their earnings projections in the last few months, with the current year adding 25 cents and moving to $1.64. The next-year estimate is pegged at $2.21, a 34% growth projection.

Valuation

After posting big gains this year, this stock doesn't come cheap, trading at 38X projected current-year income.

The Chart

Shares of LUFK are trading just below the 52-week high at $66.80. A longer term trend line that began in April should provide support if shares pull back, take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service.

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Related terms: earnings, energy, investment opinion, manufacturer, market, oil, prices, products, revenue