Chattem, Inc. (CHTT)
Marketer and manufacturer of a broad portfolio of branded over-the-counter healthcare products, toiletries and dietary supplements including such categories as topical analgesics, medicated skin care products, medicated dandruff shampoos and conditioners.
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Showed up on a screen for solid 5 year growth with low debt, cash on hand and still at attractive P/E ratios.
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Upthumb. Good cash flow but high debt. Steady growth.
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CHTT is being sued by Lectec corp for patent infringement of Lectec's transdermal patch technology. On Friday, Feb 6th, Lectec filed a preliminary injunction against the defendants. The motion is very strong. Lectec has two re-examined patents...no re-examined patent has ever been found invalid in a court of law. A top legal firm, Radar, and the case is being tried in Texarcana, the rocket-docket that's also very plaintiff friendly in patent infringement lawsuits. Lectec has an expert witness, Dr. Guy. Many other witnesses and documents will come to light.
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ibd
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Good demographics, good time to buy consumer staples.
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its gonna power its way up on earnings.
1) ice hot patch dmg over rated; its only the patch! they have other mediums of application!
2) very high debt; but that's good debt not bad debt, but i dont deny that it would have a downwards pressure on the stock price. i consider it good debt cos they used debt to acquire great brands, saving them the leg work.
3) products are more recession resilient than say, clothes, fast food, phones etc
4) high short interest as usual means two things; negative outlook or short squeeze, i'll take short squeeze this time.
5) some of you would have noticed some Robert Kellogg guy selling 1m shares (36% holdings) worth $67m of CHTT shares; but he's not part of the company! if some c-level officer does that, i'll be worried, but this dude isnt, meaning to say he could be selling for any darn reason, though the timing (so close to earnings), does raise a few eyebrows. im still sticking with my guns.
6) in normal situations i would also view CHTT's affiliation with WMT as bad; 30% of sales go to WMT. but in current economic conditions, i would lean towards that as being a good thing more than a bad thing.
7) the only downside risk i can see is the low acceptance of new and old products, but i dont quite buy that; although the recent problem does have some impact, i still believe that since their products are relatively cheap and they enjoy a solid reputation...
love that christmas song; giddy up giddy up giddy up lets go... but dont hold it for too long, the bears should claw it down after it rises.
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Increasing needs for older people health care resorting to more over the counter off brand purchases.
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Everyones favorite drugstore and home remedy stock. Probably better suited as a trading stock, but still has a general upward momentum for the long term.
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great consumer products,large shelf space
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Chattem isn't very well known but its products are. They pick up top-notch products from major companies, then repackage and advertise them. That cashes in on buried brand loyalty for products that haven't been widely sold in years. Other companies do the work and they reap the benefits.
Just picked up a basket full of stuff from JNJ, like Act mouthwash and Kaopectate. Regardless of the economy, people will always itch, get sun burn, have diarrhea, and brush their teeth. When they do, Chattem will have a familiar product ready to treat the symptoms.
Disclaimer: I'm looking to highlight some excellent Chattanooga-based publicly traded companies. This and MLR are two of the best I've found.
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top mutual fund holding within portoflios in my opinion are strong to have, this one should outperform (see other selections for stronger picks in my opinion)
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consumer products hold up well in slowdown
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Great Stats.
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THIS COMPANY SELLS GREAT PRODUCTS THAT ARE VERY USEFUL FROM GLOD BOND TO SELSUN BLUE!!
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VG products and VG management in place
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Despite recent runup, combination of new product introductions & acquiring 5 branded products from J&J & Phizer should propel EPS upwards during 2007 & 2008.
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Love the stock (I know, one should never fall in love with a stock). Have owned since $30, but market over-reacted to great news that they were buying a few brands from JNJ, and CHTT rocketed to $40, which I believe is near-term over-bought. Buy on a pullback to under $35.

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