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Lufkin Industries Inc. Message Board

  • thetobyboy2 thetobyboy2 Nov 25, 2005 1:40 PM Flag

    Undervalued

    I have made a bundle on this stock in only one year.
    smartmoney.com rates value at $133/s
    any comments?

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    • The $133 is an "intrinsic value" estimate based on a projected 35% growth rate over the next five years. The 35% may or may not be appropriate but even if a "conservative" number like 20%/year is used instead (an oil equipment industry average), the smartmoney calculator gives a value of $77.41, close to the $79 target given by Zacks Research (and services like Vectorvest). Even a 10% growth rate gives a value of $52.36 !!! At some point in time, a stock's Price and Value always will converge.

      So, yes. LUFK is definitely undervalued at $46.

    • The entire sector was rotated out of by big money. I expect big money to rotate back into the sector after the first of the year. With few exceptions, everything in this sector is extremely undervalued.