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Continuing my picks in the series of stocks that are looking at a blowout, I present some of the best companies in the business that are cashing in on solid fundamentals. Even though some of these companies have a high stock price, they trade at low earnings and sales multiples and also have future growth that will result in multiple compression. Thus, they are cheap stocks on a discounted cash flow basis that offer value, rather than merely low-priced stocks. I recommend taking action before you miss the wave.

National Presto (NPK) started out as an industrial pressure canning manufacturer, which shot to fame during the 2nd World War when it put all its resources to the production of artillery fuses, bombs and rocket fuses. It is now primarily a houseware and home appliances company that has also diversified into the defense sector, making 40 mm ammunition and precision mechanical and electro-mechanical products. A company known for innovation and frequent patent grants is now a competitive threat to giant players such as American Ammunition (OTCPK:AAMUQ). The stock last traded around $93, with a price earnings multiple of 11 times.

NPK has consistently paid dividends over the last 60 odd years, and it is unlikely to give up soon, as it has just renewed its five year contract with the army for production of a 40 mm ammunition system, in 2010. NPK’s return on equity (5 year average) and net profit margins are healthy to say the least, at 40.58% and 29.06% respectively, far exceeding the industry average.

Community Health systems (CYH) is the largest publically traded entity in the healthcare services sector in the US, with over 120 hospitals across 29 states. CYH enjoys a dominant position in many of its markets and in about 65% if its markets, it is the sole provider of healthcare services. The stock is currently trading at just over $18 a share, near its 52 week low of $14.61 with a meager price earnings multiple of under 6 times, when competitors such as Health Management Associates (HMA) trade at nearly 11 times.

A rising earnings per share in last 10 quarters and a well-above the industry average return on equity of 13.11 makes CYH a stock to watch. Having reported a quarterly revenue growth of 11.50%, the stock seems well placed compared to peers such as HCA Inc. (HCA), which saw a mere 4% growth. The operating margin is at par with the industry at 8.43% and well above the industry average (5.39%) is the return on equity of 13.11%.

Monro Muffler Brake Inc (MNRO), a leader in car repair and tire stores with over 780 stores across the United States, served over 4 million vehicles as of March 2011. MNRO has benefitted in great part due to the closure of around 3,000 independent repair shops in the US, due to recession and gave MNRO a boost in sales as a country wide service provider. The stock is currently trading around $35, above its 100 and 200 day simple moving average

With price earnings of 23 times- twice as the industry average of 13 times. While some may argue the stock is too expensive and point to the fact that it has high price to free cash flow of 21.4 as compared to industry average of 13, this company is a growth name. A market capitalization of $617 million and increase in earnings per share of 29% over the last 3 years puts MNRO tad ahead of its fading competitors like Midas Inc (MDS).

Mesa Laboratories (MLAB) is a 19th place holder in the 2009 list of Fortune fastest growing small public companies, which all by itself designs, manufactures and sells health care and industrial instrumental and disposable products. Despite operating in a very competitive market, MLAB has survived through select acquisitions like Raven Biological Laboratories, and recently SGM Biotech, and even grown by over 40% in terms of sales over the last 4 quarters.

MLAB has sustained a 5 year average return on equity at 18%, well over and above the industry average. MLAB has zero long term debt, making the balance sheet a firm one- not surprisingly, most insiders are buying this stock, currently listed on Nasdaq with a last traded price of $33.57,trading above its 50 day and 100 day moving averages, suggesting a possible breakout on the cards.

Public Storage (PSA), one of largest landlords in the world and a member of the S&P 500 as well as Forbes Global 2000, first opened its self-storage facility way back in 1972 and now operates over 2,200 company owned locations in the U.S. and Europe with an overall 135 million square feet of net rentable real estate. Interestingly, being a real estate investment trust fund, PSA is not subject to federal tax and currently pays out dividends in excess of 90% of income. This is a stock for your taxable account rather than an IRA or 401(k).

PSA has long term debt at only 8% of total assets and with a 24 times interest coverage ratio, there is absolutely no doubt in mind as to the company’s liquidity. The management forecasts and expects revenues to grow about 4% the next coming quarters due to purchase of interest in 5 public storage facilities. The stock is currently trading at $112, just 10% off its 52 week high of $124.81, with a price earnings multiple of 32 times, which compared to the industry average of 26 times is slightly more expensive than would be ideal.

Source: 5 Relatively Inexpensive Stocks Ready To Rise Fast