This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Lancaster's Eclectic Earnings: Under the Radar

"Under the Radar" uncovers little-known companies worthy of investors' consideration. Browse this week's picks.

COLUMBUS, Ohio (TheStreet) -- Lancaster Colony (LANC), based in Columbus, Ohio, has an eclectic product line-up: specialty foods, glassware and candles. Its businesses fared well during fiscal 2009, which ended June 30. Sales grew 7.2% and profit surged 137%.

The company swung to a fiscal fourth-quarter profit of $28 million, or $1.10 a share, from a loss of $2.6 million, or 9 cents a share, a year earlier. Last year's quarterly results were hampered by a $13 million loss from the sale of automotive operations.

Lancaster's gross margin rose from 18% to 28%, and its operating margin jumped from 8% to 17%. Margins benefited from cost-cutting and organic sales growth. The cost of sales fell 6% to $188 million as revenue increased 7% to $253 million.

Its specialty foods segment sells a range of products, including salad dressings, dips and even a line of caviar. Food accounted for about 90% of quarterly sales. Glassware and candles contributed the rest. Food generated $47 million of operating profit, while glassware and candles suffered a loss of $875,000.

Since the year-earlier quarter, Lancaster's balance sheet has markedly improved. The company paid off the entirety of its $55 million long-term debt and doubled its cash balance to $38 million. We give Lancaster a financial-strength score of 9.4 out of 10, higher than the "buy"-list average of 7.

The shares have rallied 51% this year, more than major U.S. indices. But at a trailing price-to-earnings ratio of 16 and a forward P/E ratio of 14, Lancaster is still cheap compared with the overall market and packaged-food peers. The stock trades at 3.5 times book value.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs