Valuation has Chattem poised for surge-Barron's

NEW YORK, Aug 26 (Reuters) - An attractive valuation and a relatively cheap stock price have shares of over-the-counter medicine maker Chattem Inc. (CHTT.O) poised for a steep climb over the next 12 to 18 months, Barron's reported in its Aug. 27 edition.

Chattem, which makes Icy Hot pain reliever and Selsun Blue shampoo, has seen its shares fall 12.5 percent from a 52-week high of $68.31 on Aug. 9. The stock closed on Friday at $59.75.

One investor said the recent pullback in the company's stock offers a strong "buying opportunity," adding that Chattem's shares could approach the $80 mark in 12 to 18 months, the newspaper reported.

Earlier this year, Chattem bought the rights to five former Pfizer Inc. (PFE.N) brands for about $410 million, and its portfolio of brands should produce strong sales over the next half decade, Chief Executive Zan Guerry told Barron's.

"I'd be disappointed if five years from today we haven't grown revenue by more than 10 percent and earnings more than 20 percent annually," Guerry told the newspaper.

Chattem's brand portfolio also includes Dexatrim weight loss products and Gold Bond powders and creams.

The five brands it recently added are Unisom sleeping pills, Cortizone cream, ACT mouthwash, Balmex diaper rash ointment and anti-diarrhea medicine Kaopectate, Barron's said.

Last month, the company said quarterly profit rose 46 percent due to sales from the five brands it recently acquired and it raised its 2007 earnings forecast. (Reporting by Justin Grant)