) --

on July 9 recommended the undervalued shares of

National Presto Industries

(NPK) - Get Report

, a small appliance maker with an outsized


TST Recommends

. Since then, the stock has jumped 48%, beating all major U.S. indices. Despite the heady run, National Presto is still attractive. With a market value of $660 million, it tells a lesser-known growth story.

National Presto manufactures and sells a diverse group of products, including small appliances, such as toasters, pressure cookers and deep-fryers; ammunition through its


subsidiary; and private-label diapers and incontinence products. This bafflingly eclectic product line-up has yielded impressive results. National Presto boasts a three-year annual growth rate of 22% for revenue and 36% for profit.

In the third quarter, profit soared 64% to $17 million, or $2.44 a share. Revenue climbed a modest 4% to $116 million. National Presto's operating margin widened from 13% to 21%. A 6% decline in the cost of sales bolstered earnings. Small-appliance revenue rose 21%, offsetting declines in the company's other two segments.

National Presto's balance sheet is masterfully pruned. It holds $132 million of cash and marketable securities and no debt. Its 3.9 quick ratio should reassure skeptical investors. We give National Presto a financial-strength score of 7.9 out of 10, higher than the "buy"-list average. Its stock has a beta, a measure of stock-market correlation, of 0.8, so the shares tend to rise and fall in congruence with the broader market.

Investors wary of a market correction should look elsewhere. But with a trailing price-to-earnings ratio of 11 and a forward price-to-earnings ratio of 12, National Presto isn't a candidate for heavy profit-taking as its shares are still remarkably cheaper than peers. Management pays an annual dividend in late February, and last year's $5.55 distribution translated to a 10.5% yield of the stock price on the payment date.

National Presto has consistently paid dividends for 65 years. Recently, the payout has included a regular $1 dividend and a bonus based on annual performance. The $4.55 of extra payments in March was a reward to the company's shareholders, who held the stock during a period of anomalous financial turmoil. The bonus dividend represented a 7% increase from the 2008 payout and a 60% increase from 2007.

During an era of pervasive corporate villainy, you have to respect a company that has treated its shareholders so well and managed its businesses so prudently. Over the past five years, which will be remembered for the decimation of U.S. wealth, National Presto has returned 23% a year, on average. We rate National Presto "buy."

-- Reported by Jake Lynch in Boston.