5-Star Stocks Poised to Pop: National Presto

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, diversified manufacturer National Presto Industries (NYSE: NPK  ) has earned a coveted five-star ranking.

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

National Presto facts

Headquarters (founded) Eau Claire, Wis. (1905)
Market Cap $643 million
Industry Aerospace and defense
Trailing-12-Month Revenue $454 million
Management Chairman/CEO Maryjo Cohen (since 1994)
CFO Randy Lieble (since 2008)
Return on Equity (average, past 3 years) 19%
Cash/Debt $118 million / $0
Dividend Yield 1%*

Sources: S&P Capital IQ and Motley Fool CAPS. *Excludes special dividends.

On CAPS, 98% of the 595 members who have rated National Presto believe the stock will outperform the S&P 500 going forward.

Just last month, one of those bulls, jdwelch62, nicely summed up the bull case for our community:

The [Department of Defense] is always gonna need more ammo, and [National Presto's] new-ish contract with the DoD is good through 2015, so I'm comfortable with that. And as Boomers get older more of them are gonna need adult diapers, and [National Presto] has started broadening their customer base for their Absorbent division, so that's got good prospects. It's an eclectic mix of products they produce, to be sure … The P/E is nice and low right now, too, so pluses there.

But before you run out and start gobbling up shares, some of National Presto's peers might actually be better suited to your own individual investing profile.

Boeing's (NYSE: BA  ) shares, for example, have held up much better than National Presto's over the past several months, so it might be a better selection for those seeking a little price momentum. Meanwhile, L-3 Communications (NYSE: LLL  ) sports a lower price-to-earnings multiple, making it a more favorable opportunity for value-hounds. And, of course, Procter & Gamble's (NYSE: PG  ) sheer size continues to make it an ideal choice for blue-chip seekers. However, when you consider that National Presto boasts about $115 million in cash on its balance sheet with zero debt, the stock seems nicely suited for small-cap investors looking to minimize their downside.

What do you think about National Presto, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of National Presto and L-3. Motley Fool newsletter services have recommended buying shares of L-3 and Procter& Gamble. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 10, 2012, at 7:42 PM, OmegaSD wrote:

    I just picked up a few of these shares for my Roth IRA, as a looooong-term play. Given that they've been doing special dividends every year for at least 4 by my count, I'm happy to reinvest the dividend, which should be enough to buy a new share each year. I also saw that insider ownership was close to 30%, much of which is by the CEO, so she's obviously got shareholder-friendly draws. Fundamentally, I like that there's 0 debt and basically half the share price is cash. The business is in industries that will hardly go away. This works best as a very long-term investment, methinks.

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