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Two Key Customer Segments Protect Realty Related National Presto Industries Inc. (NPK) Business

The Appliance & Tool Industry is normally very sensitive to the general state of the economy. This small capital company from Eau Claire, WI is a significant exception. It has the potential to beat slack demand trends by catering to two key customer groups.

The company is an important supplier to the government of defense products. It sells this range of products to contractors as well. Products include medium caliber cartridge cases and other mechanical and electrical assemblies for weapons. Supplies of such products can never decrease, even in lean economic times.

The company also has a business line of absorbent products. These cater to diaper manufacturers. The company meets adult incontinence needs as well. The revenue model is built around catering to private label demands. This gives the company stable revenue without any significant consumer marketing overhead.

The Small Appliance division of the company caters to home needs. Pressure cookers and kitchen equipment form the mainstays of the relevant product range. This division has sound, long term prospects and adds value to the stock as rising food prices nudge middle-class consumers back into the home-canning market.

The stock price has climbed steadily since the second fortnight of March 2008 to the end of the first fortnight of April 2008. The trend appears to be stable and may even accelerate. The Price to Earnings Ratio is below 10. It seems to be a most appropriate investment opportunity to watch at this point in time.

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