Lance Bucks Economy: Under the Radar

"Under the Radar" is a daily feature that uncovers little-known companies worthy of investors' consideration. Check in at 5 every morning to find out about stocks that tend to beat their bigger brethren.

CHARLOTTE, N.C. (TheStreet) -- I've developed an unintentional habit of recommending food stocks. My picks in recent weeks have included J&J Snack Foods(JJSF Quote), TreeHouse Foods(THS Quote) and Hormel Foods(HRL Quote). Despite their predictability, I stand by these companies. In fact, I'm adding another stock to the list.

Charlotte, N.C.-based Lance(LNCE Quote), the maker of Cape Cod Potato Chips and Archway Cookies, offers a strong financial position and products that will remain in demand regardless of the economy.

The market has surged from its March lows and despite what the bulls say, we've probably gotten ahead of our near-term economic outlook. Even if unemployment eases this year, consumers will be reluctant to open their wallets. For now, long-term investors should look for stocks that aren't closely tied to the economy, such as food companies.

Lance's second-quarter revenue advanced 11% to $236 million as net income surged 252% to $9.5 million, or 30 cents a share. Its operating margin rose from 3% to 7% and its net margin jumped from 1% to 4%.

Lance credits its 11% sales growth to higher prices and increased revenue from generic products, whose sales rose 16% as consumers shifted to cheaper snacks.

Lance has a financial strength score of 7 out of 10. Its balance sheet holds $4 million of cash, which translates to a quick ratio of 1.3. The company has managed its leverage conservatively, with $103 million of debt and a debt-to-equity ratio of 0.4.

Its shares are up 12% this year, outpacing the Dow Jones Industrial Average, but underperforming the S&P 500 Index. In the past year, Lance climbed 32% as the two benchmarks lost more than 17% of their value.