Healthcare products, toiletries and dietary supplements manufacturer Chattem, Inc. (Chattem) (Nasdaq: CHTT, stock) is set to announce its’ earning tomorrow, July 10th, 2007, before market open. The Company’s products target niche market segments and are among the market leaders in their respective categories across food, drug and mass merchandisers. The Company’s portfolio of products includes well-recognized brands such as Icy Hot(R), Gold Bond(R), Selsun Blue(R), ACT(R), Cortizone and Unisom(R).

Rating Indicators for CHTT:

• Wall Street consensus : 0.77
• StockScouter rating : 7 / 10
• Whisper Number for this stock : N/A
• Schaeffer rating for this stock : 7 / 10
• Power Rating : 5 / 10
• Insider Trading (last 52 weeks) : ($15.66 M)
• Zacks Analysts Rating: Hold
• Option Trading: Aug 2007 65.00 Call
• Implied Volatility (IV) for Aug 2007 $65.00 Strike : 38.21%

Sales, Income & Growth – For the past 12-months, Chattem registered $317.36 Million in sales versus the industry’s $22,187 Million. Income amounted to $43.99 Million against the industry’s $2,526 Million. While Chattem’s 12-months sales growth is at 20% the income growth is in negative 7.60% (the same industry sector sales growth is at 22% and income growth of 83.40%).

Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 13.9%. Chattem has a debt/equity ratio of 3.57 compare to industry’s ratio of 0.42.

Stock Resistance & Support Level – The resistance is at 65.87 (52-week high) while the first level support is at 62.11 (50-day moving average)

Risks – The ratio of Chattem’s price-to-earnings multiple (28.60) is above the average of all stocks within the same sector.

Chattem’s past two quarters earning had been impressing. I’ve to admit this is among one of the smallest drug manufacturers and marketers stocks around. I believe investors who’re eyeing this stock also hope for M&A possibility on this guy. Nevertheless this stock experiences sudden drop in stock price as of writing, in fact the stock slided since 10:30am trading time till now. I’m not trading huge volume on Chattem as I rarely like drug stocks but I’m attracted to the stock’s pattern. Be careful with this stock if you plan to trade the option because the volume is not high. But then if the result is good, the uptrend should be sustainable.

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July 9th, 2007 by financetwitter

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