(FORTUNE Magazine) – You can almost get a cavity by breathing the air near the plant on East Chocolate Avenue. It's worth the risk, say some security analysts, who are advising investors to follow their noses to Hershey Foods, America's largest confectioner, whose factories dominate the Pennsylvania town bearing its name. Over the past two years Hershey has returned to basics by selling off the laggardly Friendly's restaurant chain and paying $300 million for the U.S. operations of Cadbury, whose Peter Paul and other brands pushed Hershey ahead of archrival Mars for the first time since the 1970s. Hershey has also poured 25% more money into advertising. The aggressive spending took a 25-cent-a- share bite out of last year's earnings and held down the stock price. Now the company's earnings are poised to move up sharply just when other food companies' profit growth is expected to slow. Hershey was able to make the big outlays without the usual quarter-to- quarter angst about earnings. The Hershey Trust, which supports a private school for orphaned children, owns 42.5% of the stock and most of the votes, largely insulating the company from Wall Street pressures. The arrangement does not quite make the chocolate company takeover-proof, and occasionally rumors spread that a hungry giant is preparing an offer the trustees cannot refuse. But if a buyer appeared, a representative of the school trust would have to prove to the Pennsylvania attorney general that the orphans would be harmed by refusal to accept the bid. The shield against bidding wars may help more than it hurts. The stock price does not include a penny of takeover premium, and the freedom to keep pretax earnings flat for a while has let management position the company for what security analysts expect to be lush years. With revenues of $2.2 billion, Hershey controls 43.5% of the $5-billion-a- year U.S. chocolate industry. Its only remaining nonconfectionary operation is pasta, which accounts for less than a tenth of sales. Hershey's leading brand, Reese's peanut butter cups, may soon pass the top Mars brand, Snickers, as the best-selling candy in U.S. supermarkets. John McMillin of Prudential- Bache, who recommends the stock, endorses Hershey's concentration on what it knows best: ''What you're left with, now that it's gotten rid of Friendly's, is a focused company with the same investment characteristics as McDonald's and Kellogg -- and Wall Street is ignoring it because of the lack of takeover potential.'' McMillin estimates that Hershey's earnings from continuing operations will rise to $2 or $2.05 this year, up from $1.60 a year ago. The stock is selling at 12.5 times his 1989 earnings estimate, and he predicts a 15% earnings growth rate over the next five years, vs. 11% to 12% for the industry as a whole. Cadbury, with U.S. sales of about $300 million last year, should thrive under the Hershey umbrella. ''I don't think the potential of what that deal means to Hershey has been fully realized,'' says Leonard Teitelbaum of Merrill Lynch, another fan. The cost of assimilating Cadbury may pinch Hershey's bottom line this year, McMillin says, but will be offset by savings on cocoa, whose price has been falling on the world market. Says McMillin: ''We don't see a better ingredient cost picture in the entire food industry than Hershey's.'' That should cause plenty of joy down at the chocolate factory.