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Without this company, our laundry detergent would smell like cleaning fluid and our toothpaste taste like anti-freeze. International Flavors and Fragrances (NYSE: IFF) develops and manufactures the ingredients used in thousands of consumer products. The company is doing well, but you wouldn't know it by looking at its stock price.

It opened the year trading at $48.92, just about where it trades now, closing recently at $48.58, down $1.01 after reaching a high of $52.05 in mid-June. Part of the reason the stock is stuck is that IFF is thinly covered by analysts because it does not sell directly to consumers and has little name recognition.

Also, investors may be wary of any company that reports increasing interest expenses quarter after quarter. In the case of IFF, much of the interest expense increase is due to capital expenditures to build a new manufacturing facility in China, a market with huge growth potential for Western branded consumer products for which IFF will supply essential ingredients.

IIFF is in the midst of a stock repurchase program and recently authorized payment of a $0.21 per share dividend. Its P/E ratio is right at industry average, but the EPS is two and a half times industry average. The company devotes a lot of resources to R&D to track consumer tastes, literally. Such tracking is paying off handsomely in the company's increase in sales, net income and EPS quarter after quarter.

Recently released 2Q 2007 earnings indicate that overall sales of flavors and fragrances were up 8% to $574 million. This comes on top of an overall sales increase of 11% in 1Q 2007. Increase in sales is being driven primarily by the introduction of new products and higher volume sales of raw fragrance ingredients, despite downward pressure on raw ingredients selling prices.

Second quarter EPS increased 30% to $0.87, including a favorable tax adjustment of $0.11 per share. This increase is in addition to 1Q EPS increase of 19%. Despite a dramatic growth in sales, IFF has kept the lid on cost of sales which declined slightly in the quarter.. This decline was, howewver, offset by a rise in interest expense by $2 million on top of a $3 million increase in 1Q. The cost of borrowing money has increased to 4.2% and will probably continue to rise in modest increments quarter over quarter.

The few analysts who cover IFF expect big things. Their average target price for the stock is $60.50. Two analysts have upgraded the company since July. For now, there seems to be plenty of room to join this bandwagon.