On June 14, Gabelli increased his holdings 11.43%, adding 197,607 shares of Lufkin at an average price of $88.47 per share. At this point, Gabelli held 1,926,420 shares, representing 5.72% of the company’s shares outstanding.
Most recently, on June 21, Gabelli increased his holdings 13.77% by adding an additional 265,198 shares of Lufkin at an average price of $88.48 per share. Gabelli currently holds 2,191,618 shares representing approximately 6.1% of the company’s shares outstanding. Gabelli’s most recent buy into Lufkin, makes his fund the largest institutional holder of Lufkin stock.
Mario Gabelli’s holding history of Lufkin as of March 31:
About Lufkin Industries
Lufkin Industries is an oilfield and power transmission company based out of Lufkin, Texas. The company designs, manufactures and services a broad suite of Artificial Lift and Automation services to optimize and extend the production life of wells. The company also designs, manufactures and services precision speed increasing gearboxes and specialized bearings for the energy industry.
Lufkin Industries has a market cap of $3 billion; its shares were traded at around $88.50 with a P/E ratio of 33.30 and a P/S ratio of 2.30. The company had an annual average earnings growth of 14.5% over the past ten years. GuruFocus rated Lufkin Industries the business predictability rank of 2.5-star.
In the quarter ended March 31, Lufkin Industries beat expectations on revenues and EPS. The company saw revenue of $318.0 million and GAAP reported sales were 14% higher than the prior-year quarter’s $279.5 million. The EPS came in at $0.56. GAAP EPS of $0.56 for the first quarter were 65% higher than the $0.34 per share reported in the first quarter 2012.
The analysis on Lufkin reports:
· The dividend yield is close to a 2-year low.
· The P/S ratio is at a 1-year high.
· The gross margin has been a 5-year decline, decreasing approximately -3.1% per year.
· The operating margin has been in long term decline, decreasing about -9.2% per year.
· The company has shown predictable revenue and earnings growth.
Lufkin Industries’ historical price, revenue and net income:
The company’s historical P/S and P/B ratios:
According to the Peter Lynch Valuation Chart, Lufkin Industries appears to be overvalued:
The company estimates next quarter’s revenue to be around $351.3 million with an EPS of $0.82. They estimate next year’s revenue to be $1.43 billion with an EPS around $3.57.
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