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Lufkin Industries Inc. Message Board

  • nazbear88 nazbear88 May 5, 2006 11:50 AM Flag

    lufk is a much better company than

    both gdi and hydl, yet it sells at a discount. why?

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    • Recognition, i.e. street awareness - plain and simple. GDI and HYDL have many, many analysts (and therefore brokerage firms) following the stock and recommending them to clients.

      LUFK is in a situation where, similar to a company like HYDL which had been family owned and around for decades, unlike the above companies it has done any business with Wall Street in recent memory and therefore tends to fly under the radar screen.

      LUFK is selling at steep discount to its peers and I suspect that will change and that is why I am betting so much on the company. As I have mentioned previously, LUFK traded at a high PE of about 27 the first time it went to the high 60's in January - and I believe we could see that again which could lead to a potential target price over $100 per share. Of course, my near-term target is still $85 but I am hoping for the best.

      The great thing about LUFK is it is still small and undiscovered enough to catch a wild bid if only a handful of institutions create or add to a position in the company.