Based on the aggregated intelligence of 110,000 investors participating in Motley Fool CAPS, the Fool's free investing community, oil and gas equipment provider Lufkin Industries (NASDAQ:LUFK) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; and that, conversely, one-star stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Lufkin Industries' business and see what CAPS investors are saying about the stock right now.

Lufkinfacts

Headquarters (founded)

Lufkin, Texas (1902)

Market cap

$1.26 billion

Industry

Oil and gas equipment services

Trailing-12-month revenue

$596.12 million

Management

CEO John Glick (since March 2008); CFO Christopher Boone (since May 2008)

Return on equity (avg., past three years)

21.6%

CAPS members bullish on LUFK also bullish on:

Apple (NASDAQ:AAPL),

Chesapeake Energy (NYSE:CHK),

Companhia Vale (RIO)

CAPS members bearish on LUFK also bearish on:

Google (NASDAQ:GOOG),

Daktronics (NASDAQ:DAKT),

Alpha Natural Resources (NYSE:ANR),

Dell (NASDAQ:DELL)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

Over on CAPS, 254 of 256 of the All-Star members who have rated Lufkin -- some 99% -- believe the stock will outperform the S&P 500 going forward. These All-Star bulls include TMFEldrehad and JDSancho, both of whom rank in the top 2% of our community.

In October, TMFEldrehad officially singled out Lufkin for his popular stock-picking service. "[I]f you're looking to find a way to turn the world's growing appetite for energy into gains in your portfolio," TMFEldrehad wrote, "Lufkin Industries is, in my view, a clear candidate for serious consideration."

A more recent pitch by JDSancho in June nicely summarized TMFEldrehad's formal recommendation:

-- LUFK operates in 3 main segments: oilfield equipment, power transmission, and trailers. Oilfield equipment consists of 2/3 sales, and is the reason why I was attracted in the first place.
-- top line has increased 30% annually over 4 yrs
-- sign of good management: [sales, general, and administrative costs are] decreasing as % of sales
-- operating/net margins increasing [year over year] as well
-- management had a good feeling about company's prospects at the end of 2007 based on backlog & international strength (man, were they right on the money)
-- strong balance sheet w/ $0 debt and $7 cash per share

I am grateful to Big E (Eldrehad) for introducing us to a great company that will most likely continue its successful run for investors.

What do you think about Lufkin Industries -- or any other stock, for that matter? Make your voice heard on Motley Fool CAPS today. More than 110,000 investors are waiting to hear what you have to say. CAPS is 100% free, so go ahead and get started!

Apple is a Motley Fool Stock Advisor recommendation. Chesapeake Energy and Dell are Inside Value picks. Google is a Rule Breakers selection. Try any of our Foolish newsletter services free for 30 days.

Foolish contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.