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

COLUMBUS, Ohio (

TheStreet

) --

Lancaster Colony

(LANC) - Get Lancaster Colony Corporation Report

, 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.

Over a longer period, Lancaster's returns are acceptable, but not outstanding. Lancaster has delivered a 25% gain over a five-year horizon and 61% over 10 years, more than the

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Lancaster pays a 2.2% dividend yield and has a beta, a measure of stock-market correlation, of 0.4. (One is a perfect correlation.) The company's 11% net margin is higher than other "buy"-rated food stocks including

Lance

(LNCE)

and

J&J Snack

(JJSF) - Get J & J Snack Foods Corp. Report

.

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-- Reported by Jake Lynch in Boston.