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Despite Wm. Wrigley Jr.'s (WWY
) (WWY) 60% share of the U.S. chewing gum market, analysts' concerns about competition have been a drag on the stock. But on July 25, shares jumped from 43 to 45 when the company announced that second-quarter sales of gum, including Juicy Fruit and Spearmint, had gone up 3%, vs. flat-to-down forecasts. Wrigley's overall sales soared 16%, to a record $1.2 billion, while worldwide shipments jumped 8%. The momentum should continue, says Michael Schwartzman, president of ValueSearch Capital Management, which owns shares. "Excellent opportunities in Europe and China make this well-managed company a buy, particularly for long-term investors," he says. Wrigley provides "good returns and small risks," adds Schwartzman, who expects the stock to reach 80 in four years. Last year's purchase of Kraft Foods' (KFT
) Altoids and LifeSavers brands should boost Wrigley's earnings, he says, although for now they have cut into profit margins. "Unlike some analysts, we believe gum has growth potential," says Eric Katzman of Deutsche Bank (DB
), who rates the stock a "buy." Wrigley, he says, will use its global network to promote Altoids and LifeSavers. The stock is cheap, argues George Askew of investment bank Stifel Nicolaus. Trading at 19.7 times his 2007 profit estimate of $2.23 a share, the stock is an attractive value for long-term investors, he says. For 2006, Askew expects $2.03, vs. 2005's $1.93. His 12-month price target for the stock, now at 46.03, is 58.Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them. By Gene G. Marcial