Chattem (NASDAQ: CHTT) provides over-the-counter drugs, personal care products and dietary supplements. Offerings include such pain treatments as dental analgesic Benzodent, topical analgesic Aspercreme, muscle pain reliever Flexall, menstrual symptom reliever Pamprin, analgesic Icy Hot and itch medicine Cortizone-10. The company also makes Melatonex and Unisom sleep aids, Gold Bond medicated powder, Selsun Blue dandruff shampoo, ACT mouthwash and BullFrog sunblock. Chattem sells its products in eighty countries, through such merchandisers as CVS Caremark (NYSE: CVS), Safeway (NYSE: SWY) and Walgreen (NYSE: WAG).

The company surprised investors last week, when it reported Q4 EPS of 76 cents and revenues of $100.6 million. Analysts had been expecting 65 cents and $100.5 million. Management also guided FY08 EPS to $4.00-$4.20 ($3.83 consensus).

The stock popped on the news and has since moved into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the stock with three "strong buys", three "buys", three "holds" and one "underperform". The CHTT Price to Free Cash Flow ratio (18.62), Sales Growth rate (54.53%), EPS Growth rate (137.50%), Operating Margin (28.86%), Net Profit Margin (14.10%), Return on Assets (9.98%) and Return on Equity (35.39%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $49.90 and $80.99. A stop-loss of $66.50 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.